Asian shares mixed as Fed's Powell rethinks rate cuts, yields jump
Asian shares were mixed on Wednesday as the world's most powerful central banker had a change of heart on U.S. rate cuts this year, pushing Treasury yields to new five-month highs and the dollar towering against other currencies.
The beleaguered yen is plumbing fresh 34-year lows on an almost daily basis. It was last steady at 154.62 per dollar as the risk of government intervention loomed, although so far there has been no action from Tokyo apart from verbal warnings.
The New Zealand dollar gained 0.4% to $0.5902 after first-quarter inflation data showed domestically driven inflation was surprisingly strong. Markets now see just 34 basis points in total easing this year, down from 60 bps a week ago.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2%, after plunging more than 4% in the past three sessions. Taiwanese shares outperformed with a gain of 1%, while other markets were lacklustre.
Japan's Nikkei, however, dropped 0.7% to the lowest in two months. China's blue chips fell 0.1%, while Hong Kong's Hang Seng index edged 0.1% higher.
Wall Street stocks ended slightly lower on Tuesday, helped a little by still-robust corporate earnings. Two-year Treasury yields retested 5% overnight and were last at 4.9828%, while 10-years held near a five-month high at 4.6674% on diminishing expectations of Federal Reserve policy easing this year.
Fed Chair Jerome Powell said recent inflation data, with three months of upside surprises, had not given policymakers enough confidence to ease policy soon. He
