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Asia stocks wobble, Nikkei fall 1.5%; dollar firm as markets wary before key US inflation data

Asia stocks wobble, Nikkei fall 1.5%; dollar firm as markets wary before key US inflation data

Asia stocks wobble, Nikkei fall 1.5%; dollar firm as markets wary before key US inflation data
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By Reuters Apr 12, 2022 8:09:52 AM IST (Published)

Tech stocks weighed on Wall Street during Monday's session as the Dow Jones Industrial Average (.DJI) fell 1.19 percent, the S&P 500 (.SPX) lost 1.69 percent and the Nasdaq Composite (.IXIC) dropped 2.18 percent. All 11 S&P 500 sectors fell.

Asian shares were down while the US dollar held strong on Tuesday, as Treasury yields spiked to a three year high ahead of US inflation data which could foreshadow even more aggressive interest rate hikes from the Federal Reserve.

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MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.3 percent, after US stocks ended the previous session with mild losses.
Australian shares were down 0.65 percent, while Japan's Nikkei stock index slid 1.5 percent.
Higher US bond yields were supporting the dollar, with the US currency's index measure against six peers moving back over 100 to test last week's near-two-year high.
The Japanese currency bore the brunt of the losses against the greenback, which rose to 125.77 yen overnight, its highest since June 2015.
The yen has been under the gun over recent months as the Bank of Japan has committed to ultra-easy policy even as many other major central banks, led by the Fed, have embarked on tightening monetary conditions.
The euro was buffeted by politics, unable to hold onto gains from its mini-relief rally on Monday after French leader Emmanuel Macron beat far-right challenger Marine Le Pen in the first round of presidential voting.
It was last steady at $1.087.
"US stocks fell on Monday as investors grew increasingly concerned a three-year high in the benchmark US 10-year Treasury yield would start to slow the economy, and looked ahead to the upcoming earnings season for signs of what impact inflation is having on corporate profits," Ord Minnett research analysts wrote to clients on Tuesday.
China's markets gained ground as signs emerged that some of the strict restrictions were starting to ease across the country's financial capital.
World markets have been hit hard in the past few months on worries the Ukraine war, Fed's tightening and China's tough new COVID-19 restrictions could set back global growth.
Hong Kong's Hang Seng Index gained 0.6 percent in early trade on Tuesday, while China's bluechip CSI300 Index was up 0.4 percent.
Tech stocks weighed on Wall Street during Monday's session as the Dow Jones Industrial Average (.DJI) fell 1.19 percent, the S&P 500 (.SPX) lost 1.69 percent and the Nasdaq Composite (.IXIC) dropped 2.18 percent. All 11 S&P 500 sectors fell.
Economists polled by Reuters forecast the US consumer price index (CPI) on Tuesday would post an 8.4 percent year-over-year increase in March.
NatWest Markets economists have forecast a 1.1 percent month-on-month jump in the headline inflation figure which would be the largest monthly gain since June 2008.
"We're quite hawkish in terms of US rate hikes and we think it's not just the amount of tightening but the pace which is going to impact investors," Elizabeth Tian, Citigroup's equity derivatives director in Sydney told Reuters.
Equities markets have been very resilient and quite relaxed compared to the fixed income markets but we're expecting at the Fed's May meeting there will be some kind of announcement in terms of quantitative easing tapering and that is when we could see the volatility emerging in the equities.
"The question is going to be how do markets react to the velocity of rate hikes we could see."
Early in the Asian session, the yield on benchmark 10-year Treasury notes rose to 2.8107 percent compared with its US close of 2.782 percent on Monday.
The two-year yield, which rises with traders' expectations of higher Fed fund rates, touched 2.5242 percent compared with a US close of 2.508 percent.
US crude ticked up 0.85 percent to $95.09 a barrel. Brent crude rose to $99.18 per barrel.
Gold was slightly lower. Spot gold was traded at $1951.45 per ounce.
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