Asian shares mixed after Wall Street rally fizzles

SEOUL, South Korea/January 11, 2018 (AP)(STL.News) —Asian stock markets were mixed on Thursday after Wall Street benchmarks posted their first losses of 2018. Reports that China may slow its purchases of U.S. government bonds weighed on investor sentiment.

KEEPING SCORE: Japan’s Nikkei 225 fell 0.3 percent to 23,710.43 and South Korea’s Kospi retreated 0.5 percent to 2,487.91. Hong Kong’s Hang Seng index edged 0.1 percent higher to 31,100.45 and the Shanghai Composite index erased earlier losses to edge 0.1 percent higher at 3,425.34, nearly unchanged from the previous session. Australia’s S&P/ASX 200 slumped 0.5 percent to 6,067.60. Most stock markets in Southeast Asia were weaker.

CHINA: A report by Bloomberg News said China is considering slowing or halting its purchases of U.S. Treasurys, which helped push yields higher. The report triggered sell-offs of U.S. government bonds and the yield on the 10-year Treasury reached its highest level since March at one point before pulling back. China’s foreign exchange regulator rejected the report as wrong. It said management of foreign exchange reserves was based on market conditions and investment needs.

ANALYST’S TAKE: “Justifiably, Beijing’s biggest worry is that the value of its U.S. bond holdings will be eroded substantially by rising inflation and supply,” Mizuho Bank Ltd. said in a daily commentary. “Doubts about (U.S. bonds) allure should not be overblown as threat of imminent dumping.”

JAPAN: Bank of Japan unexpectedly cut its purchases of long-dated Japanese government bonds, sending the Japanese yen higher against the U.S. dollar. Bank of America Merrill Lynch said in a report that the market reaction was “a bit excessive” and perhaps more extreme than expected but highlighted the importance of communication going forward.

WALL STREET: U.S. stocks finished lower on Wednesday. The Standard & Poor’s 500 index fell 0.1 percent to 2,748.23. The Dow Jones industrial average dropped 0.1 percent to 25,369.13 while the Nasdaq composite fell 0.1 percent to 7,153.57. The Russell 2000 index of small-cap stocks slipped 0.30 points, or less than 0.1 percent, to 1,559.80.

CURRENCIES: The dollar rose to 111.82 Japanese yen from 111.43 yen. The euro fell slightly to $1.1936 from $1.1948.

OIL: Benchmark U.S. crude lost 10 cents to $63.47 per barrel on the New York Mercantile Exchange. The contract added 61 cents to settle at $63.57 per barrel on Wednesday. Brent crude, the international standard, fell 16 cents to $69.04 per barrel in London. It gained 38 cents to $69.20 a barrel on Wednesday.

By Associated Press, published on STL.NEWS by St. Louis Media, LLC (J.S)

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