Asian stocks fall, dollar rises with bond yields

Sydney - Most Asian equity benchmarks declined with US futures and the dollar rose as Treasury yields climbed back toward recent four-year highs.

Japan’s Topix index dropped after staging its second-best performance this year, while shares in Australia and South Korea also fell, taking their cue from European markets as US equities and Treasuries took a break for the Presidents’ Day holiday.

The MSCI Asia Pacific Index declined. Hong Kong shares bucked the trend, climbing after traders returned to their desks after a holiday.

Investor focus now turns to the US Treasury, which opens its auction floodgates this week, beginning with $151bn of short-term bills on Tuesday. With little in the way of significant economic data on the schedule, the sales will provide the clearest gauge yet of how steeply bond yields may rise in the world’s largest economy.

Traders will also be parsing minutes from the Federal Reserve’s latest meeting.

Bank of Japan Governor Haruhiko Kuroda did not discuss monetary policy during an appearance in parliament. Speculation has been swirling about the possibility the BOJ is scaling back its stimulus since the central bank reduced its purchases of government bonds in January.

Elsewhere, oil climbed above $62 a barrel for the first time in more than a week as an alliance of some of the world’s largest oil producer’s signalled further cooperation to tighten supplies through the end of the year. Bitcoin broke above $11 000.

Here are some key events scheduled for this week:

The Federal Reserve will release minutes on Wednesday of its January 30 to 31 meeting, Janet Yellen’s last as chair, where officials kept the rate unchanged. Fed policy makers speaking this week include New York Fed President William Dudley and Atlanta Fed President Raphael Bostic.

Cleveland Fed President Loretta Mester is among speakers at the US Monetary Policy Forum in New York City.  

Companies announcing earnings this week include: Walmart, Home Depot, HSBC, BHP Billiton, Glencore, Barclays. Chinese markets reopen on Thursday.

These are the main moves in markets:

Stocks

The Topix fell 1% as of 12:13pm in Tokyo. Japan’s Nikkei 225 Stock Average declined 1.2%. Australia’s S&P/ASX 200 Index fell 0.1%. South Korea’s Kospi index was down 0.7%.

The Hang Seng Index in Hong Kong rose 0.6%. Futures on the S&P 500 lost 0.1%. The MSCI Asia Pacific Index fell 0.5%.

Currencies

The Bloomberg Dollar Spot Index was up 0.2%. The euro declined 0.2% to $1.2388. The yen fell 0.1% to 106.74 per dollar.

Bonds

The yield on 10-year US Treasuries climbed two basis points to 2.90%. Australia’s 10-year yield rose two basis points to 2.91%.

Commodities

West Texas Intermediate crude rose 1% to $62.29 a barrel. Gold fell 0.3% to $1 341.99 an ounce.