Shares in Asia retreated as investors positioned themselves for an action-packed week, including the release of US consumer price data that may confirm the inflation battle isn’t over, dashing hopes of a Federal Reserve rate pivot.
The negative sentiment reverberated across major indexes in Asia, with a regional equity benchmark headed for its lowest close in more than a month.
Contracts for US stock futures slid.
The S&P 500 ended last week 1,1 percent lower, while the tech-heavy Nasdaq 100 slipped 2,1 percent, the worst weekly performance this year for the two indexes.
Bonds fell as well, with the Bloomberg Global Aggregate index dropping 1,6 percent, the worst weekly run since September.
Yields on Australian and New Zealand government bonds advanced following a selloff in US government debt Friday that pushed up the 10-year Treasury yield by seven basis points.
Treasuries were rangebound on Monday and the dollar strengthened against all currencies in the Group-of-10 basket.
The yen weakened past 132 per dollar after whipsawing Friday following news reports that Kazuo Ueda would be picked to become the Bank of Japan’s next governor.
Investors initially interpreted the decision as a potentially hawkish choice.
Those gains were trimmed after Ueda spoke to reporters and said the BOJ’s stimulus should stay in place.
Japan’s government is set to officially announce the nomination of the new BOJ governor on Tuesday.
For the time being, Ueda seems to be more hawkish than the current dovish Governor Haruhiko Kuroda, according to Yujiro Goto, head of foreign-exchange strategy at Nomura Holdings Inc. – Bloomberg
