South Korea’s Kospi jumps 6% as Asian stocks rise after bond rally

Asian stocks and bonds experienced a surge on Thursday (August 20), buoyed by U.S. plans to buy back longer-maturity debt and a steadier U.S. dollar. The benchmark 10-year yield dropped by a similar amount to 4.63 percent, extending its six-basis-point decline from the previous session. MSCI's Asia Pacific equities gauge rose by 1.7 percent, ending a two-day losing streak.

Notably, South Korea's Kospi Index jumped by 6 percent, with SK Hynix soaring 13 percent on a share buyback plan. Samsung Electronics also saw a rise of more than 5 percent. U.S. equity-index futures gained, although European shares were expected to decline at the market open.

The increase in Asian equities was driven by a sell-off in global bonds as investors sought higher compensation for inflation risks and higher government debt levels. Tensions in the Middle East also contributed to the price pressures. Gerald Gan, chief investment officer at Reed Capital, stated that the buybacks were a temporary measure as the U.S. Treasury was concerned about long-term borrowing costs.

Meanwhile, gold slipped 0.4 percent to around US$4,500 an ounce after reaching its highest level since early June. Bitcoin climbed above US$69,000 after U.S. President Donald Trump pushed Congress to pass a key crypto bill during his visit to the White House. As sentiment improved, U.S. equity-index futures advanced in Asian trading, while contracts for the Nasdaq 100 Index rose 0.4 percent.

Bloomberg's gauge of the U.S. dollar was little changed in Asia, after sliding 0.8 percent on Wednesday to the lowest level since May as Treasury yields declined. Lloyd Chan, a foreign exchange strategist at MUFG Bank in Singapore, noted that while buybacks alone were unlikely to change longer-term fundamentals, they demonstrated policymakers' willingness to counter further yield increases.