Stocks Rise; 10-Year Treasury Yield Edges Higher

Asian equities rose to fresh highs Friday, heading for a sixth week of gains, even as U.S. Treasury yields reached their highest since 2016. The dollar index declined for a second day, trading close to a four-month low.

The MSCI Asia Pacific Index climbed, led by industrial and technology stocks, with Japanese shares posting the largest gains. Equities in Seoul and Shanghai also rose, while those in Sydney drifted. Treasuries edged lower as yields rose above 2.63 percent. The greenback fell as investors continue to monitor the possibility of a U.S. government shutdown, with federal spending authority set to expire Friday. The yuan strengthened beyond 6.4 per dollar for the first time since 2015, having climbed 1 percent this week.

The rise in bond yields comes as investor concerns mount about the pace of price rises in the American economy. Thursday’s sale of U.S. bonds that offer a hedge against faster inflation attracted strong demand. Together with China’s better-than-expected growth data, this added to the narrative of a global economic expansion that has helped drive equities to record highs this year.

Elsewhere, oil declined after a rally that has driven prices to the highest level in more than three years, as a rebound in U.S. crude output offset a ninth weekly stockpile drop. Bitcoin steadied above $11,000.

These are the main moves in markets:

Stocks

Euro Stoxx 50 futures were little changed in early European trading. Futures on the S&P 500 Index declined 0.1 percent.

The MSCI Asia Pacific Index climbed 0.5 percent as of 4:25 p.m. Tokyo time, the highest on record.

Topix index gained 0.7 percent, the biggest rise in two weeks.

Hong Kong’s Hang Seng Index dipped less than 0.05 percent.

Kospi index climbed 0.2 percent.

Australia’s S&P/ASX 200 Index fell 0.1 percent to the lowest in five weeks.

Currencies

The Bloomberg Dollar Spot Index fell 0.1 percent to the lowest in about three years.

The Japanese yen rose 0.3 percent to 110.78 per dollar.

The euro increased 0.1 percent to $1.2253.

Bonds

The yield on 10-year Treasuries gained one basis point to 2.637 percent, the highest in more than three years.

German 10-year bund yields were up two basis points at 0.59 percent.

Commodities

West Texas Intermediate crude dipped 1.3 percent to $63.11 a barrel, the lowest in more than a week on the biggest decrease in more than five weeks.

Gold rose 0.4 percent to $1,331.69 an ounce, the largest advance in a week.

LME copper gained 0.5 percent to $7,111.00 per metric ton.

Source: Bloomberg