Asian shares hit 11-month low on Middle East anxiety, surging yields
Asian shares plumbed a fresh 11-month trough on Friday as fears of a regional conflict in the Middle East intensified and as a relentless rise in long-term U.S. yields pressured valuations, while supply concerns lifted oil prices further.
The surge in the 10-year U.S.
benchmark yield overnight to 5% has raised borrowing costs around the world. On Friday, the Bank of Japan intervened in the Japanese government bond (JGB) market as the 10-year JGB yield touched a decade high.
A much-watched speech overnight from Federal Reserve Chair Jerome Powell led to a choppy market response, although most investors leaned further into bets that the Fed will extend its rate pause in November.
MSCI's broadest index of Asia-Pacific shares outside Japan skidded 0.8% to a fresh low since November last year, bringing the weekly loss to a sizeable 3%.
Tokyo's Nikkei fell 1% and was down 3.6% for the week.
China's blue chips fell 0.4%, while Hong Kong's Hang Seng index slumped 1%. China on Friday held its benchmark lending rates steady as the economy showed signs of stabilisation.
Sentiment is also fragile after Tesla shares dropped 9% after its quarterly results disappointed, with a warning about consumer demand from Elon Musk sparking a sell off in EV stocks.
On the geopolitical front, fears of a spreading regional conflict are rising after the U.S.
intercepted three cruise missiles and several drones launched by the Iran-aligned Houthi movement from Yemen potentially toward Israel.
U.S. President Joe Biden in a speech on Thursday asked Americans to spend billions more dollars to help Israel fight Hamas, as an expected ground invasion with the aim of annihilating Hamas nears.
«World leaders continue to trek to the Middle East to —
