Asian Stock Markets Decline After The Yen Stabilizes Late

Japan, Australia, and China stocks declined, and the region’s index is on its way to incurring its first loss in 3 days

Asian stocks decreased after stocks of American technology companies declined at the end of trading, while the yen stabilized after yesterday’s decline, which raised new speculation that officials would intervene to support the currency.

Stocks fell in Japan, Australia and China, putting the MSCI Asia-Pacific equity index on course for its first loss in three sessions.

Emerging market currencies

The currency index fell emerging markets to its lowest level in two months, the Asian currency gauge also fell to levels not seen since 2022 as traders flocked to the haven of the dollar. Treasuries extended their recent declines, even after yesterday’s $70 billion five-year bond auction showed signs of good demand.

“It’s all about the US Federal Reserve – keeping rates higher for longer makes short-term yields very high, which attracts money to the US,” said Andrew Brenner, head of international fixed income at NatAlliance Securities LLC. It keeps the dollar strong.” He added that this represents a “problem for Japan.”

Chipmakers retreat

Micron shares fell after the computer memory chip maker forecast sales that fell short of some investors’ estimates. This news led to a decline in the shares of some chip manufacturing companies, including “NVIDIA” Giant.

Also after Wall Street closed, the Federal Reserve said that the largest US banks had passed their annual stress test, paving the way for increased shareholder payouts.

The market’s recent attempt to rise without relying on a group of major stocks was short-lived, and an indicator that measures the extent to which the market relies on a group of stocks to enhance its movements indicates market weakness, which enhances uncertainty about the continued strength of the rise. The discrepancy between the performance of the S&P 500 and “a measure of how much the market relies on a group of stocks to fuel its movements” has reached one of the worst levels in three decades, according to Bloomberg Intelligence.

Rely on technology stocks

“At the end of the day, the market is still too reliant on big tech stocks,” said David Bahnsen of Bahnsen Group. “Excessive investor sentiment, euphoria, and exaggerated momentum always end the same way whether the volatility that tech stocks experienced this week is The past is the beginning of something deeper or not, or whether this decline will continue or not.”

In other markets in Asia, South Korea priced its first bonds in dollars since October 2021, yesterday, Wednesday. The country sold $1 billion in five-year bonds, according to a person familiar with the matter. This deal represents an extension of the recent boom in dollar bond issuances in Asia, as last week witnessed the busiest period of value selling since January 2023.

In the commodities market, gold mostly maintained the decline it witnessed yesterday, Wednesday, as it fell to its lowest level in about three weeks. West Texas Intermediate crude fell.

AFP