(Bloomberg) — Stocks in Asia fell Thursday as investors analyzed a weakening yen and the prospect of a further U.S. interest rate cut next month.
Most read from Bloomberg
Stocks in Japan, South Korea and Australia rose, while those in China and Taiwan fell. Shares listed in Hong Kong tumbled as the stock exchange remained open despite signs of severe weather. US stocks were little changed as the post-election rally appeared to stall. The S&P 500 was flat and the tech-heavy Nasdaq 100 fell 0.2%.
Shares of the region’s chipmakers fell as investors continued to weigh the sector’s prospects following Donald Trump’s victory and his promises for higher tariffs. Taiwan Semiconductor Manufacturing Co., a key component of a major Asian stock index, fell as much as 1%. SK Hynix, a South Korean chipmaker, fell as much as 4.8%.
Chinese stocks may remain within their range given signals from policymakers at last week’s legislative meeting that stimulus measures are unlikely to be aimed at a major reacceleration of growth, Kaanhari Singh, head of Asia cross asset strategy at Barclays, said on Bloomberg Television.
“That matters because it appears that China’s fiscal stimulus could be reactive rather than proactive,” Singh said. “The broad theme of the higher dollar is what has increased risks in the region for currencies and equities.”
US consumer price data was broadly in line with expectations, although three-month annualized core interest rates rose. Overall, the data was supportive of a possible Fed rate cut in mid-December, with swap traders raising the probability to about 80%, up from about 56% earlier Wednesday.
The nuanced figures caused short-term bond yields to fall, with the two-year yield falling by five basis points to 4.29%. The 10-year yield rose for a third day, two basis points higher, to the highest level since July. Government bond yields were slightly higher across the curve in Asian trading on Thursday.
A gauge for the dollar changed little after Wednesday’s advance. The yen continued to decline against the dollar, reaching its weakest level since July. The decline has left the yen near levels at which Japanese authorities last intervened to support the currency, with the country’s top currency official warning against the one-sided, sudden moves.