Asian shares track Wall Street's retreat as bond markets crank up the pressure
Asian stock markets declined on Wednesday as rising bond yields pressured investments, with Japan’s Nikkei 225 dropping 1.2% and Hong Kong’s Hang Seng falling 0.6%, while U.S. futures remained flat after tech-heavy indexes posted losses. The 10-year Japanese government bond yield hit its highest level since 1997 at nearly 2.8%, and bond market unease over prolonged inflation threatens stock rallies, particularly in AI-driven tech sectors like Nvidia, which fell 0.8% after reporting concerns.
Asian shares mostly declined on Wednesday as rising bond yields increased pressure on stocks, reversing gains fueled by artificial-intelligence optimism. Japan’s Nikkei 225 fell 1.2% to 59,834.15, while Hong Kong’s Hang Seng dropped 0.6% to 25,635.82 and China’s Shanghai Composite lost 0.5% to 4,148.16. Australia’s S&P/ASX 200 also declined 0.8% to 8,533.60, though South Korea’s Kospi rose 0.3% to 7,292.41 after a prior sell-off. The 10-year Japanese government bond yield slipped below 2.8% but remained near its highest level since 1997, reflecting broader bond market stress. Rising yields, driven by concerns over prolonged inflation amid the Iran war, have made stocks appear more expensive and threatened economic growth. The dollar weakened slightly to 159.00 yen, while the euro dipped to $1.1601. U.S. stock futures showed little movement after the S&P 500 fell 0.7% Tuesday, closing at 7,353.61 for its third straight loss. The Dow Jones dropped 0.6% to 49,363.88, and the Nasdaq sank 0.8% to 25,870.71, with tech stocks underperforming due to valuation concerns. Nvidia, a major tech influencer, fell 0.8% Tuesday and was a key drag on the S&P 500. Meanwhile, oil prices fluctuated amid uncertainty over the Strait of Hormuz closure, with U.S. benchmark crude at $103.70 and Brent crude at $110.78. Gasoline prices rose again to $4.53 per gallon, up 43% from last year. Higher bond yields could also push up mortgage and loan rates, impacting AI data center investments. Investors will watch Nvidia’s latest quarterly results, as its performance could determine whether tech stocks and broader U.S. markets can sustain their rally. The company’s earnings report will be critical, given its outsized influence on Wall Street.
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