Japanese Shares Pull Asia Higher as Yields Rise – Asia Market Wrap

Japanese equities surged in Asia, with banking sectors benefiting from the expectation of rising lending rates, bringing a Japan equity benchmark closer to a record high.

Bank and insurance companies in Japan contributed significantly to the Topix index’s advance, as domestic 10-year yields remained over 1% on speculation that the central bank will boost policy rates. The MSCI Asia Pacific Index rose to its highest level since late May, boosted by a surge in Hong Kong-listed property and electric car maker companies.

Most other regional benchmarks moved in a limited range as traders considered the likelihood of another Donald Trump administration following his debate with Joe Biden last week. Equities in Australia and South Korea fell. US stock futures dipped during Asian hours, despite Wall Street pushing higher Monday on a surge in tech megacaps.

The 10-year Treasury rates reversed part of their seven-basis-point advance on Monday, when the benchmark hit 4.5% on anticipation that a Trump administration would result in increased US budget deficits and inflation.