Asian markets fall on Wednesday

Asian stocks extended losses on Wednesday as renewed tension over US threats to seize Greenland revived the Sell America trade ahead of President Donald Trump’s speech at the World Economic Forum in Davos.

MSCI’s Asia Pacific index outside Japan fell 0.5 per cent, while Japan’s Nikkei dropped 0.5 per cent for a fifth straight session. Chinese blue chips outperformed the region, gaining 0.5 per cent. Wall Street slid more than 2 per cent overnight, marking its steepest one-day fall in three months, as the dollar posted its biggest daily drop in over a month.

Bond markets showed tentative recovery after sharp selling. Japanese government bonds rebounded as yields retreated from record highs, with 40 year yields down 11 basis points to 4.1 per cent after a surge a day earlier.

US Treasury yields also eased, with the 10 year slipping to 4.2767 per cent, though concerns lingered over foreign selling after a Danish pension fund said it would divest about $100 million in US Treasuries by month end.

In currency markets, the dollar steadied after a 0.5 per cent fall, the yen held near 158.13 per dollar, and the Swiss franc hit a record high against the yen.

Attribution: Reuters