Asian share markets eased today as a spike in global bond yields soured sentiment toward richly priced tech stocks. — Reuters picSYDNEY, March 19 — Asian share markets eased today as a spike in global bond yields soured sentiment toward richly priced tech stocks, while a stampede out of crowded positions in crude oil caused the sharpest setback in months.
Equities were also choppy as a pullback on Wall Street knocked Japan’s Nikkei down 0.7 per cent and South Korea 1 per cent. MSCI’s broadest index of Asia-Pacific shares outside Japan followed with a fall of 0.5 per cent. “Stronger growth and higher inflation but no rate hikes is a potent cocktail for risk assets and equity markets,” said Nomura economist Andrew Ticehurst.
The drastic bearish steepening of the yield curve reflects the risk the Fed is serious about keeping short-term rates low until inflation accelerates, so requiring longer-term bonds to offer fatter returns to compensate. The jump in Treasury yields provided some support to the US dollar, though analysts fret that faster US economic growth will also widen the current account deficit to levels that will ultimately drag on the currency.