Asian shares waver as oil and yields rise ahead of Fed, BOJ meetings
TOKYO: Asian shares struggled on Tuesday as investors weighed Middle East tensions and calls by industry figures for a slowdown in AI development, while elevated oil prices and higher bond yields added to caution before key central bank meetings in the US and Japan.
Tokyo's Asian stock markets experienced a mixed performance on Tuesday as investors grappled with rising oil prices, the prospect of a potential interest rate hike from the Federal Reserve, and the latest concerns surrounding artificial intelligence development. Amidst geopolitical tensions including an attack by Iran-aligned Houthis on Saudi Arabia's oil infrastructure, markets remained cautious.
Elevated oil prices pushed US crude up 1.27% to $102.68 per barrel, while Brent crude climbed 1.21% to $106.96 per barrel. Bond yields also climbed, with US Treasury yields reaching 5% for the first time since 2023 and Japan's 10-year bond yield touching 3%. The Bank of Japan is expected to raise its interest rate by 25 basis points at its meeting later in the week.
MSCI's Asia-Pacific index outside Japan slipped 0.12%, with South Korea's index falling 0.25%. Japan's Nikkei index edged higher after initial losses. While some analysts support a 25 basis-point increase, worries over energy price effects, strong AI-related demand, and a potentially temporarily higher neutral rate argue for a more cautious approach.
Written by urgent.news from New Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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