STOCK SELLOFF HITS ASIA AS BOND YIELDS RISE

Asian stocks fell with US futures Thursday, March 4, 2021, after an overnight surge in bond yields once more dragged down shares on Wall Street. The dollar strengthened and benchmark Treasury yields ticked higher, Andreea Papuc and Emily Barrett reported for Bloomberg News.

Stocks dropped in Japan, South Korea and Australia, while S&P 500 futures saw modest declines. Earlier, the Nasdaq 100 slumped to a two-month low, and the S&P 500 extended its slide into a second day.

A selloff in high-flying giants such as Apple Inc. and Amazon.com Inc. outweighed gains in banks and energy producers. Australian bonds slumped after benchmark Treasury yields approached 1.5% on Thursday, and a market gauge of inflation expectations over the next five years hit its highest level since 2008.

Traders also assessed data pointing to a slow and uneven economic recovery from the depths of the pandemic. Oil extended losses.

S&P 500 futures fell 0.4% as of 9:07 a.m. in Tokyo. The S&P 500 fell 1.3%. The Nasdaq 100 lost 2.9%. Topix index fell 0.7%. Australia’s S&P/ASX 200 Index fell 1.2%.

The Kospi index fell 1.3%. Hang Seng Index futures fell 0.9% earlier. In currencies, the yen traded at 107.03 per dollar. The offshore yuan was at 6.4781 per dollar.

The Bloomberg Dollar Spot Index gained 0.1%. The euro traded at $1.2056, down 0.1%. The yield on 10-year Treasuries was steady at 1.49% after rising nine basis points. Australia’s 10-year bond yield rose 10 basis points to 1.77%. West Texas Intermediate crude fell 0.8% to $60.79 a barrel. Gold was at $1,711.40 an ounce after sliding, Rita Nazareth and Claire Ballentine reported for Bloomberg News.

The sell-off in Treasuries has rattled nerves across the globe amid warnings of excessive investor optimism in stocks. Policymakers still appear reluctant to step in to buy more longer-dated bonds, with focus turning to Federal Reserve Chairman Jerome Powell’s upcoming comments.

Chicago Fed President Charles Evans said Wednesday he shared the view that the recent rise in yields was healthy. “Inflation is a concern; there is a lot of money sloshing around the system and it makes sense to have some sort of a correction right now,” said Shana Sissel, Spotlight Asset Group chief investment officer. “And bond yields going up are the market’s implicit way of tightening since the Fed has made it clear they don’t have the intention of doing so.”

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