TOKYO- Asia’s share markets struggled on Wednesday as US Treasury yields hit fresh two-year highs and a global technology stock sell-off unsettled investors worrying about inflation and bracing for tighter US monetary policy.
Oil prices hit their highest since 2014 amid an outage on a pipeline from Iraq to Turkey and global political tensions, stoking fears of inflation becoming more persistent and propping up the dollar, which hovered near one-week highs.
MSCI’s broadest index of Asia-Pacific shares outside Japan reflected the sombre tone, trading down 0.1 percent in mid-morning trade after closing lower for four days straight.
Australia lost half a percent, while Japan’s Nikkei slid 1.8 percent as technology stocks fell and worries over new curbs on businesses to halt a record surge in coronavirus cases curbed risk appetite.
Shares in Sony Group 6758.T slumped to their lowest level since late October, losing as much as a tenth of their value after gaming rival Microsoft said it will buy developer Activision Blizzard.
Elsewhere, South Korea’s Kospi lost 0.3 percent, while China’s blue-chip indexwas flat and Hong Kong’s Hang Seng index bucked the downtrend to rise 0.1 percent.
“There’s probably money rotating out of the United States as there’s such a concentrated pool of capital in US equities, specifically in technology companies,” said Chris Weston, head of research at brokerage Pepperstone.
“You may see some of that capital redistributed.”
The prospect of higher US rates continued to play out in fixed income markets, with benchmark US Treasury yields at fresh two-year highs.
Ten-year yields were up about 1 basis point at 1.8860 percent after hitting as much as 1.8900 percent, while five-year yields were at 1.6795 percent, also holding near new two-year highs recorded early in the session. — Reuters
