Asian stocks opened lower, dragged down by the decline on Wall Street

Bloomberg – Asian stocks fell, following in the footsteps of their U.S. counterparts, after jobs data reinforced the view that the Federal Reserve should keep interest rates high and keep interest rates high. It will raise Treasury yields.

Shares fell more than 1% at the open in Japan and South Korea and were lower in Australia. The regional benchmark index is heading towards a technical correction. Benchmark index futures in Hong Kong pointed to losses, while indexes in the United States were little changed.

The S&P 500 fell to a four-month low on Tuesday and yields on 10- and 30-year U.S. debt rose to their highest level since 2007 after job creation unexpectedly increased. The vote that brought down the Speaker of the US House of Representatives, Kevin McCarthy More uncertainty about fuel After Wall Street’s fear index, or VIX, rose to its highest level since May.

Wall Street expects long-term interest rates to reach 5%. The rise in yields sparked concern in the credit market, with at least two issuers canceling sales on Tuesday. Treasuries were flat on Wednesday Asian time.

The yen maintained its losses after Masato Kanda’s decision. Head of Foreign Exchange in Japan He declined to comment on whether any intervention had been implemented on Tuesday after the currency fell to its weakest level in a year.

Indicator Bloomberg The dollar’s strength stabilized after reaching its highest level since November on TuesdayThis is due to rising Treasury yields.

“The subsequent recovery in USD/JPY demonstrates how difficult it is to change the course of the exchange rate on a sustainable basis,” said Tony Sycamore, market analyst at IG Australia. “Unless US bond yields start falling, the best the authorities can hope for is to buy time and slow the rate of USD/JPY’s rise above 150 degrees.

Australian and New Zealand sovereign bonds have fallen since the open. New Zealand’s central bank is expected to keep interest rates unchanged late Wednesday, but policymakers may leave the door open for another hike if needed to control inflation. China is in the middle of a week-long vacation.

Federal bets

US markets fell on Tuesday after the number of job openings rose to 9.61 million in August, compared to less than 9 million the previous month, according to the Bureau of Labor Statistics. The report prompted swap traders to increase bets on a December Fed rate hike to more than 50%.

Atlanta Fed President Rafael Bostic, who will not vote this year, beat the “go higher for longer” drum on Tuesday, saying the central bank needs to keep interest rates high “for a long time.” He expects one rate cut for 2024, towards the end of the year. His comments followed those of other Fed policymakers, who were also hawkish.

“The current environment is characterized by a tone of extreme uncertainty and growing concerns that the fourth quarter will provide a litmus test to see whether markets (and by implication the real economy) Flexible enough to manage ever-higher borrowing costs.BMO Capital Markets strategists Ian Lingen and Ben Jeffery wrote in a note.

The next major data for the US labor market will be the monthly payroll report on Friday.

On the other hand, oil prices stabilized ahead of the review of the global crude oil market by OPEC+ and the weekly update of US reserves. Gold barely changed.

-With assistance from Christine Flanagan.

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