© Reuters.
From Gina Lee
Investing.com – Asia Pacific stocks fell Friday morning and continued to decline Thursday after US Treasury bond movements added investor nervousness.
China fell 0.29% to 10:25 p.m. CET (03:25 p.m. GMT) and the tariff fell 0.07%. China's National People's Congress opened on Friday, setting a conservative over 6% below economists' forecasts for 2021. Congress also outlined fiscal support to aid China's economic recovery from COVID-19.
Beijing has also put reforms in Hong Kong's electoral system on the agenda of its annual two-session sessions that began Thursday. The reforms could result in the Hong Kong legislative council elections being postponed for another year until September 2022 and restricting the election of democracy activists. Congress is now due to review a draft resolution proposing the reforms in the coming days.
Hong Kong fell 1.07%.
Japan slipped 1.48%. Japanese Prime Minister Yoshihide Suga said the current state of emergency in the Tokyo area, due to expire on March 7, could be extended by two weeks.
South Korea was down 0.88% and Australia was down 0.99%.
Federal Reserve Chairman Jerome Powell disappointed expectations during the Wall Street Journal's employment summit on Thursday by declining to suggest buying long-term bonds to keep longer-term interest rates down. However, he did mention the recent surge in yields, without indicating any intervention during his speech at the summit, and said he "would be hit by disorderly conditions".
Bond yields rose in Australia after a 10-year Treasury Department surge to 1.56% pushed the yield curve to its steepest point since 2015. The dollar rose on Friday.
Some investors have expressed concerns about rising inflation and the impact of higher yields on higher stock valuations, while others view interest rate movements as a positive sign of economic recovery.
"The US dollar is up 0.8% and there you see the holy trinity of market fears – rising real rates, heightened expectations for rate hikes and a stronger US dollar," said Chris Weston, head of research at Pepperstone Markets Ltd. to Reuters.
Other investors agreed with Weston.
"It makes logical and intuitive sense that government bond yields should go back up to 1.50% or 2%, but we are concerned about the rest of the market in terms of the speed at which it can get there," said Allianz's investment (DE 🙂 Global Investors LLC The strategist Mona Mahajan told Bloomberg.
Meanwhile, the U.S. Senate voted Thursday to accept President Joe Biden's $ 19 trillion stimulus package. The chamber is expected to approve the country's sixth stimulus package since COVID-19-induced lockdowns began a year ago at the end of the debate this weekend.
Investors are also waiting for the February US employment report due later in the day.
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