Asian shares were under pressure on
Thursday as indications by U.S. policymakers of aggressive rate
hikes and balance sheet reductions sparked a selloff in the
region, with equities in the Philippines leading losses.
Stocks in Manila fell 2.6% to mark their worst session
in more than three weeks. The Thailand index shed 1.6%
to track its biggest dip in a month, while South Korean
and Taiwanese shares also fell over 1% each.
Minutes of the U.S. Federal Reserve’s meeting in March
released overnight showed deepening concerns among policymakers
that inflation had broadened through the economy, and hinted at
policymakers agreeing on balance sheet reductions.
Investors are gauging whether the Fed’s views could jolt the
flattened Treasury yield curve, which has been signaling a
potential recession on the horizon.
Yields on U.S. Treasury securities ticked higher following
the minutes, with returns on the 10-year note
climbing to 2.6%.
“Asia bond curves have steepened dramatically, compared with
the United States. This is unlikely to reverse until the U.S.
front-end rates stabilizes,” analysts at Bank of America said in
Yields on Singapore’s 10-year bond edged lower
to 2.484%, but were hovering at over three-year highs hit in the
previous session. Indonesia’s benchmark bonds rose to
Meanwhile, worries about rising COVID-19 cases in China also
persisted. Shanghai, under a city-wide lockdown, reported over
19,000 new cases on April 6, although a vast majority was
asymptomatic. China’s stocks fell over 1%.
Investors have also been eyeing global central banks’ policy
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