Oil futures rose nearly 3% to a two-week high in Asia.
The yen broke the key 120 level against the dollar for the first time since 2016 and Treasuries extended losses after US Federal Reserve Chairman Jerome Powell signaled a more aggressive tightening of monetary policy on Monday than previously expected. .
MSCI’s broadest index of Asia-Pacific stocks outside of Japan rose 0.2%, led by gains in Australia’s heavyweight miners and banks index <.AXJO, which hit a two-month high. [.AX]
Japan’s Nikkei rose 1.7% to 27,276. [.T]
“This very strong rise in commodity prices actually has a relatively mixed picture…because we have a few notable commodity exporters in this region who could possibly benefit,” said Manishi Raychaudhuri, Asia-Pacific equity strategist. at BNP Paribas.
In the meantime, “investors are getting the idea that central banks in developed markets will normalize their monetary policy,” he added.
Mr Powell had sparked a bond rout overnight after telling the National Association for Business Economics that the US central bank was ready to do what it took to fight inflation and that bigger than usual hikes would be rolled out if necessary.
Treasury bonds and U.S. equity futures remained on edge, with S&P 500 futures down 0.3% and the rate-sensitive Nasdaq 100 down 0.4%. Yields on 10-year Treasury notes hit an almost three-year high of 2.3330%. [US/]
Federal funds futures now price two-thirds the probability of a 50 basis point rate hike in May.
The Japanese yen, also sensitive to rising US rates, briefly rose above 120 to the dollar and last bought at 119.90. [FRX/]
Chinese markets, on the other hand, are awaiting an easing in monetary policy after it was signaled by the authorities last week.
China’s flagship index opened 0.2% lower, while Hong Kong’s benchmark Hang Seng index rose 0.7%.
Shares of China Eastern Airlines Hong Kong fell 5.5% after its Boeing 737-800 with 132 people on board crashed in the mountains of southern China on Monday.
Meanwhile, the lack of progress in peace talks between Russia and Ukraine continued to weigh on sentiment. The conflict rages as Ukraine said on Monday it would not obey Russia’s ultimatums after Moscow demanded that it stop defending besieged Mariupol.
Oil futures stretched gains on Tuesday morning following reports that some members of the European Union were considering imposing sanctions on Russian oil and as attacks on Saudi oil facilities sent shivers down the spine. market [O/R]
Brent crude rose 2.9% to $118.93 a barrel. US crude oil rose 2.4% to $114.85 a barrel.
The yen fell about 0.4% to briefly hit 120.08 per dollar at the start of trading in Asia.
In other currency exchanges, the euro was down 0.2% on the day at $1.0992, having lost 2.09% in one month, while the Dollar Index, which tracks the greenback against a basket currencies of other major trading partners, was up 98.758.
Gold was down slightly at $1,930.27 an ounce.