10 Jan Asia Markets: Asian markets’ fast start to 2018 finally hits a wall
Some Asian stock markets pulled back early Wednesday, putting an end to a big start to 2018 for global equities.
Despite fresh records Tuesday on Wall Street, indexes were down almost 0.5% in Japan NIK, -0.13% , Australia XJO, -0.51% and Taiwan Y9999, -0.60% after fresh rising to fresh multiyear highs on Tuesday. Korea’s Kospi SEU, -0.17% , a laggard Tuesday, fell 0.3% as index heavyweight Samsung Electronics 005930, -2.54% slid 2.3%, extending its 3% decline Tuesday after its fourth-quarter earnings estimate fell short of analysts’ expectations.
Markets in China SHCOMP, +0.35% and Hong Kong fared better in their opening minutes, hovering around Tuesday’s finishing levels. Hong Kong’s Hang Seng Index HSI, +0.68% is set to post a record 12th straight gain Wednesday.
New Zealand’s NZX 50 Index NZ50GR, -0.81% posted the sharpest decline in the region. The index was recently down 0.8% on a selloff, with respiratory-care company Fisher & Paykel Healthcare FPH, -2.12% falling 2.6%.
The pullback in Asian stocks Wednesday came as the yield on 10-year U.S. Treasurys rose to 2.551%, the highest level since March. Bond yields rise when prices fall.
Japanese government-bond yields rose further as a result, building on Tuesday’s gain after the Bank of Japan trimmed the amount of longer-dated bond purchases by 5%. The 10-year JGB yield was recently up 0.015 percentage point at 0.08%, the highest level since October.
The yen extended Tuesday’s rebound, with the dollar JPYUSD, +0.287558% falling to ¥112.30 from ¥112.60 in early Asian trading.
The yuan, which pulled back Tuesday afternoon, fell further to 6.53 against the dollar after the central bank set the yuan’s daily trading midpoint 0.4% below Tuesday’s level, the largest weakening since September.
On Tuesday, the People’s Bank of China said banks could independently adjust the “countercyclical factor” it introduced last year to curb fluctuations in the yuan. Analysts at Nomura said that without the measures, yuan volatility should increase.
Oil futures climbed further, hitting fresh three-year highs. The U.S. benchmark rose 0.7% as an industry group said domestic oil inventories fell much more than what is expected in Wednesday’s weekly government report.