Asian equities tumbled on Wednesday as a jump in oil prices pushed global bond yields higher, reviving fears that central banks may have to keep monetary policy tight. Japan's Nikkei and South Korea's KOSPI led the regional losses, while Australia's economy grew faster than expected and New Zealand's central bank raised rates for a second straight meeting.
Asian stocks fell sharply on Wednesday as Brent crude rose to around $96 a barrel, extending gains after earlier touching a five-week high. The move pushed global bond yields up and revived concern that central banks may need to hold monetary policy tight.
Nikkei, KOSPI lead broad declines
Japan's Nikkei 225 declined 3%, while the broader TOPIX index slipped 2.5%, weighed down by sharp losses in tech stocks.
Japanese markets were also pressured by expectations of a rate hike from the Bank of Japan later this month. A day earlier, BOJ Governor Kazuo Ueda said the central bank would continue to consider rate increases and assess whether economic and price developments remained consistent with its outlook. The statement followed a meeting in which U.S. Treasury Secretary Scott Bessent called for decisive monetary steps from Ueda to combat the weak yen, according to the U.S. Treasury Department.
South Korea's KOSPI dropped 4%, with heavyweights Samsung Electronics and SK Hynix both falling more than 4%.
Oil surge pushes yields to multi-year highs
The jump in oil prices raised concern that a prolonged disruption to energy supplies could push inflation higher, complicating the outlook for central banks. As a result, the U.S. 10-year Treasury yield rose to 4.804%, its highest level since January 2025, while Japan's 10-year government bond yield touched 3%.
Wall Street had already ended modestly lower overnight as the yield surge weighed on equities, and futures tied to the S&P 500 and Nasdaq dipped in Asian trading. Elsewhere in the region, China's Shanghai Composite and the CSI 300 each fell 1%, while Hong Kong's Hang Seng slipped 0.5%.
Australia's GDP beats forecasts as RBNZ hikes again
Australia's economy grew 0.4% in the second quarter from the previous quarter, taking annual GDP growth to 2.1%, according to the Australian Bureau of Statistics. The data showed continued expansion despite concerns over slowing demand and higher borrowing costs, and Australia's S&P/ASX 200 still ended 1% lower as it reinforced expectations of another Reserve Bank of Australia rate hike this year.
In New Zealand, the Reserve Bank raised its official cash rate by 25 basis points to 2.75%, its second consecutive increase, as policymakers sought to contain inflation. New Zealand's NZX 50 closed 1% higher, while India's Nifty 50 fell 0.9% and Singapore's Straits Times Index edged up 0.2%.
Source: Investing.com
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