Asian stocks built on losses in the U.S. on rekindled concerns about what a potential trade war and a more hawkish Federal Reserve could do to global economic growth. The yen jumped after Bank of Japan Governor Haruhiko Kuroda discussed the timing of a possible exit from its stimulus policy.
Japan bore the brunt of declines, with the Topix Index extending losses after Kuroda’s comments. Shares in Hong Kong, China, Australia and South Korea were also weaker after U.S. stocks posted a third day of declines. U.S. President Donald Trump promised to impose substantial tariffs on foreign metals and European Commission President Jean-Claude Juncker said Europe will respond “firmly” to any new tariffs. Treasuries retreated and German bunds climbed. The dollar steadied.
“We’re entering a period of turbulence,” Sebastien Page, head of asset allocation at T. Rowe Price, told Bloomberg TV from Baltimore. “So at the margin we are taking away from equities, adding both bonds and cash.”
The Cboe Volatility Index is up 35 percent this week as Fed chair Jerome Powell opened the door to speculation that the central bank may quicken the pace of monetary tightening, a move investors worry could derail economic growth. In his Senate testimony Thursday, he called for gradual interest rate hikes and said the economy wasn’t overheating.
Elsewhere, oil steadied after a decline on concerns about increasing U.S. crude production. Bitcoin climbed above $11,000 on course to post a 12 percent increase this week.
Here are some key events scheduled for the remainder of this week:
Bank of England Governor Mark Carney speech for the inaugural Scottish Economics Conference.
U.K. Prime Minister Theresa May delivers a speech Friday on Britain’s relationship with the European Union.
China’s annual national legislative meetings start Saturday and are set to run over two-plus weeks.
Italy goes to the polls on Sunday. Read more on how Italian bond spreads could widen substantially should a euroskeptic alliance come to power.
These are the main moves in markets:
The MSCI Asia Pacific Index fell 0.9 percent as of 4:07 p.m. Tokyo time.
Topix index declined 1.8 percent.
Hong Kong’s Hang Seng Index declined 1.6 percent.
Kospi index fell 1 percent.
Australia’s S&P/ASX 200 Index fell 0.7 percent.
Futures on the S&P 500 Index rose less than 0.05 percent.
The Bloomberg Dollar Spot Index fell 0.1 percent.
The Japanese yen rose 0.3 percent to 105.92 per dollar.
The euro fell less than 0.05 percent to $1.2261.
The Australian dollar rose 0.1 percent to 0.776 per dollar.
The yield on 10-year Treasuries rose one basis point to 2.82 percent.
Japan’s 10-year yield climbed two basis points to 0.063 percent.
Australia’s 10-year yield fell two basis points to 2.737 percent.
West Texas Intermediate crude fell less than 0.05 percent to $60.97 a barrel.
Gold rose less than 0.05 percent to $1,317.25 an ounce.
LME copper rose 0.3 percent to $6,941.00 per metric ton.