Global Bond Selloff Extends in Asia After US CPI – Asia Market Wrap

After stronger-than-expected US inflation confirmed the belief that the Federal Reserve is taking its time lowering interest rates, bonds in Asia experienced a dramatic decline.

In Australia and New Zealand, benchmark 10-year rates increased by over 10 basis points. The equivalent in Japan increased to its highest level since November. Following a selloff on Wednesday that saw the 10-year yield rise above 4.5% for the first time in five months, US Treasuries saw a minor recovery.

Wednesday saw the worst performance in a global bond gauge since February 2023, and the largest fall in a Treasuries index since August 2022.

In Asia, stocks declined, but losses were limited. China’s and Japan’s criteria varied while those in Australia and Hong Kong fell. Following a big loss for President Yoon Suk Yeol’s party in the parliamentary elections, South Korean stocks recovered from their previous falls. After the S&P 500 lost 1% and the Nasdaq 100 sank 0.9% on Wednesday, US futures remained stable.