Asian stocks mixed on US election concerns

Asian stocks were mixed on Wednesday due to concerns about rising US Treasury yields and uncertainty surrounding the US presidential election, leading investors to be cautious with their investments.

US Treasury yields have reached a three-month peak, leading to the dollar strengthening against the euro, sterling, and the yen, which has returned to 150 yen per dollar. Japanese officials have issued verbal warnings in response.

MSCI’s Asia-Pacific index outside Japan is slightly up 0.06 per cent, while Tokyo’s Nikkei is trading lower. Market volatility is expected to continue as investors prepare for key events like the US presidential election and corporate earnings reports.

China and Hong Kong stocks opened steadily on Wednesday, with government support for the economy boosting major indexes.

The yield on US 10-year notes reached 4.216 per cent in Asian trading, after recording a three-month high of 4.222 per cent in the previous session.

Prashant Newnaha, a senior rates strategist at TD Securities, noted that improving election odds for Trump are affecting market expectations for Fed policy, with the possibility of the Fed pausing for six months in 2025.

The yen slid to a three-month low of 151.74 yen per dollar in the Asian morning, while the euro hit $1.0792, its lowest level since August 2.

In commodities, gold prices hit a record high of $2,749.07 in early trade before settling near $2,743.42. The conflict in the Middle East, along with uncertainty around the Fed outlook and the US election, has stoked demand for safe-haven assets.

Brent crude futures fell 0.4 per cent to $75.73 a barrel, while West Texas Intermediate crude futures eased 0.38 per cent to $71.47 per barrel after a sharp rise earlier this week.

Attribution: Reuters

Subediting: M. S. Salama