The negative sentiment reverberated across major indexes in Asia, with a regional equity benchmark headed for its lowest close in more than a month. Contracts for US stock futures slid. The S&P 500 ended last week 1.1% lower, while the tech-heavy Nasdaq 100 slipped 2.1%, the worst weekly performance this year for the two indexes. Bonds fell as well, with the Bloomberg Global Aggregate index dropping 1.6%, the worst weekly run since September.
The yen weakened after whipsawing on Friday following news reports that Kazuo Ueda would be picked to become the Bank of Japan’s next governor. Investors initially interpreted the decision as a potentially hawkish choice. Those gains were trimmed after Ueda spoke to reporters and said the BOJ’s stimulus should stay in place. Japan’s government is set to officially announce the nomination of the new BOJ governor on Tuesday.
Investors are reassessing how high US interest rates will rise this year, with inflation and jobs data likely to still come in hot later this week. That has fueled bets for the Fed rate to peak at 5.2% in July, up from less than 5% a month ago.