Asian stocks fall as inflation fears rock markets

Asian stocks fell below global equities after concerns over the central bank’s monetary tightening experienced the worst day on Wall Street in nearly five months.

Japan led the Asian market down Wednesday morning, with Topix down 2.6%. Australia’s benchmark S & P / ASX 200 fell 1.8%, while the Hang Seng index in Hong Kong and the CSI 300 in China both fell around 1% in morning trading.

The stock market sell-off will take place after the Federal Reserve Board of Governors and Bank of England policymakers say: Rate hike High and sustained inflation could bring the market faster than expected.

The prospect of faster tightening has pushed up yields in inverse proportion to bond prices. Yields on 10-year US Treasuries rose 0.2 points last week, spurring further sales of equities. The S&P 500 closed Tuesday down 2%. The worst fall day Since May, the technology-focused Nasdaq Composite has fallen 2.8%.

The Federal Reserve said last week that it could reduce this $ 120 billion monthly asset purchase He said that half of the board members expected an interest rate hike in 2022. After that, the Bank of England issued the following warning: UK inflation may exceed 4% Next year.

“For the fourth quarter, this doesn’t really look like the best backdrop,” said Robert Kernel, Asia-Pacific research manager at ING, as Treasury yields rise and energy prices soar . ,and Contagion From the Chinese developer helped Evergrande, which made a splash in the global market last week.

The yen continued to depreciate against the US dollar on Wednesday, and the Japanese currency temporarily hit its lowest level since March 2020 after depreciating about 2% from last week.

The yen hit 111.68 yen against the US dollar amid the political uncertainty surrounding it. Election of the new Prime Minister of Japan According to members of the Liberal Democratic Party in power today.

According to traders, the yen acts as a double barometer of sentiment in the face of rising US yields and commodity prices, adding that the currency will fall sharply in both directions until the results are clear. He said it was hard to see.

Shusuke Yamada, Chief Japan Equity and FX Strategist at Bank of America, said higher US yields would attract bond investments from Japan. Meanwhile, Japan’s trade deficit in August was a sign of Japan’s sensitivity to high-priced imports.

Soaring global commodity prices have raised concerns about inflation. Brent, Benchmark International, Hopped over $ 80 a barrel On Tuesday, for the first time since October 2018, soaring natural gas prices led countries to look elsewhere for energy demand.

Oil prices fell in Asian trading on Wednesday, with Brent falling about 1% to $ 78.19 a barrel.