MSCI’s most comprehensive index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) fell 0.6%. At the same time, Japan’s Nikkei (NI225) withdrew from a more than two-month high as crude oil rose prices stoked inflation worries.
South Korea Won (KRW=KFTC) cut 0.6% in Asia after the country nominated International Monetary Fund official Rhee Chang-yong as its new central bank chief. Rhee should maintain the Bank of Korea’s steps to restrain inflation while taking a less hawkish perspective than his predecessor.
Elsewhere, Thai baht (THB=TH); moreover, Philippine peso (PHP=); Singapore dollar (USDSGD); finally, Malaysian ringgit (USDMYR) reduced marginally as the U.S. dollar (DXY) gained ground against major currencies.
Overnight, U.S. Treasuries caught a sharp sell-off. The 10-year benchmark yields (US10YT=RR) retreated from an almost three-year peak as investors evaluated the U.S. Federal Reserve’s hawkish stance.
Asian bond markets also suffered a resumed sell-off.
Singapore’s 5-year yields (SG5YT=RR) increased to 2.133% for the first time after December 2018.
The 10-year yields in the Philippines (PH10YT=RR), Malaysia (MY10YT=RR), and Thailand (TH10YT=RR) bounded higher, while Indonesia’s 10-year benchmark yield (ID10YT=RR) fell slightly.
Among Asia’s equity markets, Singapore shares (STI) bounced 0.8% to their highest in four weeks, led by travel-related stocks after the city-state further softened coronavirus curbs for completely vaccinated visitors.
The city-state’s flagship carrier Singapore Airlines (C6L), bounced 2.9%, transport services provider ComfortDelGro Corp (C52) increased 4.2%. Resorts and casino developer Genting Singapore (G13) counted 3.8%.
Philippine Central Bank Policy Expected
Elsewhere, shares in Indonesia (COMPOSITE) and the Philippines (.PSI) earned approximately 0.5% each. South Korea’s KOSPI (KOSPI) and Malaysian benchmark (BURSA) dropped 0.5% and 0.2%, respectively.
Meanwhile, in a judgment due later in the day, the Philippine central bank is widely anticipated to keep its policy rate unchanged.
Analysts at TD Securities predict the Bangko Sentral ng Pilipinas to hike rates in the second half of this year. At the same time, a Reuters poll indicated the overnight repurchase facility would drive up 50 basis points in the last quarter.