Sanaa:Asian shares fell on Thursday as markets were pressured by rising bond yields and surging oil prices, following a retreat from record highs on Wall Street.
According to United News of Bangladesh, the yield on the 10-year US Treasury remained near its highest levels in decades following the release of minutes from the US Federal Reserve's latest meeting that indicated most policymakers anticipate another interest rate hike this year. This development impacted Asian markets, with Japan's Nikkei 225 dropping 0.9%, South Korea's Kospi down 0.8%, Hong Kong's Hang Seng falling 0.2%, and the Shanghai Composite decreasing by 0.1%. Australia's S&P/ASX 200 declined 0.6%, while Taiwan's Taiex fell 0.7%.
On Wall Street, the S&P 500 fell 0.2% on Wednesday after reaching a record high the previous day. The Dow Jones Industrial Average dropped 0.7%, and the Nasdaq composite slipped 0.2% from its record. The US Federal Reserve had raised its key interest rate by 0.25 percentage points in September, setting the target range to 3.75%-4%, as inflation remained above the 2% target.
Higher bond yields can increase borrowing costs for businesses and consumers, negatively affecting stock markets. US Treasury yields have risen amid a global energy shock linked to the Iran war, with additional pressure from growing US government debt. The 10-year Treasury yield reached around 5.31% on Thursday, after hitting 5.36% on Wednesday, its highest level since 2002.
Oil prices climbed amid uncertainty over global supplies, with the US and Iran yet to reach an agreement to end their conflict. Brent crude, the international benchmark, rose 2.2% to $102.43 a barrel, while US benchmark crude gained 1.9% to $89.96. The International Energy Agency noted that its members support accelerating releases of oil from strategic reserves.
Currency movements were also noted as the US dollar strengthened to 158.20 Japanese yen, and the euro edged up to $1.1198 due to higher French bond yields and concerns about France's government debt.