Asia Market Wrap

23 Sep 2022 02:30AUD Australia China Europe GBP Japan JPY KRW New Zealand NZD South Korea UK US Bonds US Indexes USD

- Following another day of losses for US equities and climbing government yields that reinforce forecasts for tighter monetary policy and a faltering global economy, Asian stocks were on track for a sixth weekly decrease.

- Equities slumped in Hong Kong, Australia, and South Korea on Friday as the S&P 500 sank to its lowest level since June. The US futures market varied.

- On Thursday, the 10-yr treasury yield jumped 18 bps to 3.7%, its highest level in a decade, as investors evaluated the likelihood of a recession. Asia's rates rose, driven by a more than 20 bps increase in Australia as trade resumed following a holiday.

- Cash treasuries are not traded during Asian hours, as markets in Japan are closed for the autumnal equinox.

- After a day of spectacular currency market changes that saw Japan intervene to prop up the ailing yen for the first time since 1998, the dollar index maintained a record high. The offshore yuan fell in response to measures to curb its devaluation, with the PBoC setting the daily reference rate higher than expected for the 22nd day.

- Japan's intervention hasn't addressed the root reason for the yen weakening, which is the widening gap between Japan's ultra-easy monetary policy and rising rates in other nations, leaving the currency susceptible.

- Rate hikes in the UK Switzerland, and Norway overnight, as well as increases in Asia on Thursday in the Philippines, Indonesia, and Taiwan, are expected to dampen market confidence in the area.