Rising bond yields support value stocks ahead of central bank meetings

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Bond yields climbed and stock markets held steady on Wednesday, as hopes of easing U.S.-China tensions and diminished risk of a no-deal Brexit ...

TOKYO: Bond yields climbed and stock markets held steady on Wednesday, as hopes of easing U.S.-China tensions and diminished risk of a no-deal Brexit prompted traders to take profit before key central bank meetings.

Japan's Nikkei average climbed 0.9per cent, with the Topix Value index jumping 1.9per cent whereas the Topix Growth added 0.8per cent. "Global bond markets are experiencing so-called momentum crashes," said Masanari Takada, cross-asset strategist at Nomura Securities, referring to a sudden and dramatic change in the direction of asset prices.U.S. bond yields jumped on Wednesday, with the 10-year Treasuries yield rising more than 10 basis points to a one-month high of 1.745per cent.

Investors had bought bonds for many weeks on expectations that the ECB will dole out stimulus, with a cut in interest rates of at least 10 basis points fully priced in. Oil prices rose on Wednesday after an industry report showed that crude stockpiles in the United States fell last week by more than twice the amount that analysts had forecast. Prices hovered near their strongest in six weeks despite small losses on Tuesday after U.S. President Donald Trump fired national security adviser John Bolton.

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