Asia stocks down, yen slump keeps markets on intervention alert
bond yields spiked on nervousness about inflation on Thursday, while the yen's slide past 160-per-dollar had currency traders bracing for Japan to step in and steady it.
The dollar made six-week highs on sterling and the kiwi and at 160.7 yen traded just shy of Thursday's 38-year peak. The jittery mood had frothy sectors of financial markets especially vulnerable and Nasdaq futures dropped 0.5%.
Shares in bellwether chipmaker Micron Technology slid 8% in U.S. after-hours trade as it met rather than topped lofty revenue expectations. Japan's Nikkei fell 1%. [.T]
MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.5%, with some of the largest losses in Australia where rate sensitive stocks sank following Wednesday's data showing a surprise jump in inflation. [.AX]
«Australia's inflation is broadly at the highest levels in the developed world now,» said CommSec senior economist Ryan Felsman, with the market re-pricing risks of further hikes.
Australian three-year government bond yields had leapt 18 basis points on Wednesday, after inflation accelerated to a six-month high in May, and rose another 10 bps on Thursday to 4.21%, tracking an overnight sell-off in U.S. Treasuries.
Swaps markets price about a 40% chance Australia's central bank hikes rates by 25 bps in August, up from around 10% before the inflation surprise.
Ten-year Australian government bond yields are above U.S. 10-year yields for the first time since February and the Australian dollar has been steady in the face of broad U.S.
