Fed Pause, Long Bonds Fall as Nasdaq Futures Rise – Asia Market Wrap
Long-dated government bonds remained under pressure as uncertainty over the Fed’s policy outlook pushed US Treasury yields higher. The US 30-year Treasury yield rose 3 bps to 5.23%, its highest level since 2007, extending Wednesday’s 11 bps surge after the Fed left interest rates unchanged for a seventh consecutive meeting.
Asian bond markets followed the US move lower, with long-dated debt in Australia, New Zealand and Japan declining. Japan’s 30-year government bond yield climbed 4.5 bps to 3.975%, while UK 10-year gilt futures fell for a second straight session ahead of the BoE’s policy decision.
Asian equities traded erratically, with South Korea’s Kospi swinging between gains of 5.5% and losses of 2.1% as investors digested the Fed’s outlook and ongoing volatility in technology stocks.
US equity futures pointed higher after the Nasdaq 100 entered a technical correction on Wednesday. Microsoft jumped almost 9% in after-hours trading after posting its strongest cloud-computing growth in four years, while Meta fell 7.5% after issuing a disappointing revenue forecast. European markets were set for a muted open.
Attention now turns to the BoE’s interest rate decision later on Thursday, followed by the BoJ on Friday, as investors assess how global central banks will respond to persistent inflation pressures and rising long-term bond yields.
