Asia Markets Rally Amid Fed Rate Hike Uncertainty
Asian markets staged a relief rally on Thursday as investors awaited fresh US data and central banker comments for signals that could determine whether the Federal Reserve tightens policy this month. Shares and bonds rose, while Japanese government bond yields slid from historic peaks, tracking a recovery in Treasuries.
The yen added to gains, rising 0.67% to 157.64 per dollar, its strongest since August 10. The dollar index fell 0.21% to 99.39. US Treasury yields eased from multi-year highs overnight, with the yield on benchmark U.S. 10-year notes falling 1.79 basis points to 4.776%.
Investors remained on edge over developments in the Middle East after the US and Iran exchanged their largest barrage of attacks since July, reviving fears of a broader regional escalation.
Gavin Friend, a senior markets strategist at NAB, said that if the war were to be put to bed, it would certainly be something positive to bring yields back down again across the board. Traders have recently increased bets on a Federal Reserve interest rate hike, with a roughly 62% chance of a 25-basis-point rate increase this month.