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Bonds will be easier to sell in Asia as stocks fall further

In Asia on Friday, global equities continued to recede as the crash of government bonds in the international market due to rising inflation concerns eased.

In early trading in the region, yields on 10-year Treasuries rose 0.23 percentage points overnight, surpassing 1.5 percent for the first time in over a year, and then declining 0.06 percentage points to 1.456 percent. It was. .. Bond prices go up as yields go down.

In Tokyo, the early sale of the session resulted in a benchmark 10-year government bond yield of 0.178%. This is the highest level since the Bank of Japan (BOJ) announced in early 2016 that it would introduce a negative interest rate policy. After that, the yield stabilized at 0.141%.

In Australia, 10-year Treasury yields initially surged 0.16 percentage points to 1.858 percent, the highest level since April 2019. It then fell 1.714 percent, or 0.01 percentage points.

In the Asia-Pacific stock market, Japan’s Tokyo Stock Price Index fell by more than 2% in the first hour of trading, while Australia’s leading stock S & P / ASX 200 fell by 2%. Hong Kong’s Hang Seng Index fell 1.9% and Mainland China’s CSI 300 fell 1.1%.

Friday’s volatility arises as concerns among investors grow that a global economic recovery from the Covid-19 pandemic could create. Inflationary pressure, The United States and other central banks are causing monetary policy to tighten.

“U.S. economic outlook boosted by improved pandemics, vaccine distribution, and presidential outlook [Joe] Biden’s fiscal package has passed parliament and investors are now sticking to the risks of inflation and economic overheating, “said Thai Hui, chief Asian market strategist at JP Morgan Asset Management.

One night In the United StatesConcerns about inflation have spread to Wall Street. The technology-intensive Nasdaq stock index has fallen 3.5% on its worst day since October, while the S & P 500 has fallen 2.5%. S & P 500 futures rose 0.3% on Friday morning in Asia.

What is the focus of investors Central bank reacts Concerns over rising bond yields and asset price bubbles.

The Reserve Bank of Australia announced on Friday that it would buy three-year government bonds unplanned for A $ 3 billion ($ 2.4 billion) to meet its yield targets.

Meanwhile, Tokyo traders speculate that global market yields could encourage the Bank of Japan to enter bond and equity markets, prevent 10-year Treasury yields from exceeding 0.2%, and support Topix. Did.

Takeo Kamai, executive service manager at Tokyo’s brokerage firm CLSA, said the decline in Topix is ​​almost certain that the Bank of Japan will buy large quantities of exchange-traded funds (ETFs) for the first time since January 28. It was.

“They do that, but it doesn’t make much of a difference. The recent surge in Japanese equities that pushed the Nikkei Stock Average to its 30-year high has never been triggered by a strong domestic catalyst, he said. Mr. Imai added.

“Japan was only part of the global euphoria, so [stocks] They will fall, they will fall soon, “he said.

Takenobu Nakajima, rate strategist at Nomura Securities, said speculation about possible actions by the Bank of Japan could act on Friday if the BOJ’s serious evening sales could cause a surge of more than 0.2. Percentage when Tokyo reopened on Monday, saying it is focusing on.

Bonds will be easier to sell in Asia as stocks fall further

Source link Bonds will be easier to sell in Asia as stocks fall further

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