Asian stocks resume drop in rollercoaster trade: Markets wrap
Equity benchmarks dropped in Japan and Australia, while futures pointed to modest gains in Hong Kong. The S&P 500 and Nasdaq 100 rose on Tuesday — following a Japan-led rebound in Asia — with both climbing 1% after a global meltdown. Wall Street’s “fear gauge” — the VIX — saw its biggest plunge since 2010.
Both the Nikkei and the Topix are down about 18% from highs hit last month, after sliding into a bear market on Aug. 5 when losses exceeded 20%. The yen slipped for a second day after a recent surge.
The dollar and Treasuries were steady in early Asia trading.
“The critical element for Japanese, and as we’ve seen, global equities, is the strength of the yen, which is itself an expression of the US economic outlook,” said Kyle Rodda, a senior market analyst at Capital.Com. “For now, the USDJPY is waffling around 145. If it remains fairly non-volatile and perhaps grinds higher, it will support a Nikkei recovery and a return to normalcy.”
The government and the Bank of Japan agreed to closely monitor developments in the economy and financial markets with a sense of urgency, Vice Finance Minister for International Affairs Atsushi Mimura said after a meeting between the Finance Ministry, the BOJ and the Financial Services Agency.
Treasury 10-year yields were flat after jumping 10 basis points to 3.89% Tuesday. Traders are also moderating expectations of deep Federal Reserve rate cuts this year. Swaps point to around 105 basis points of easing, compared to as much as 150 basis points on Monday.
Elsewhere, the
