Asian stocks fell for a sixth day, their longest losing streak since February, as anxiety over the health of the global economy investors. South Korea’s won dropped by the most in four months, crude oil traded below $44 a barrel and sovereign bonds rallied.
Australia’s benchmark was set for its biggest loss in a month as BHP Billiton Ltd. plunged by the most since 2008. Indonesia’s sank to a two-month low after data showed its gross domestic product grew less than economists forecast. Oil gained, after tumbling by about 5% in the last two days. A gauge of dollar strength rose, extending Tuesday’s bounce from the weakest level in almost a year, after Federal Reserve officials flagged the possibility of an interest-rate hike in June. Australian government debt advanced. In a familiar theme, traders are becoming concerned about the possibility that the next volatile market swing, in this case downward, may not be too far away. Both U.S. stock market valuations and commodity prices have risen to levels that could be difficult to sustain against the ongoing reality of sluggish global demand growth.
The Japanese yen fell 0.5 percent to 107.13 per dollar. Finance Minister Taro Aso said Tuesday, when the currency reached an 18-month high of 105.55, that the government is monitoring speculative foreign-exchange trades and will respond if needed. The yen has strengthened more than twice as much as any other major currency in the past week as the Bank of Japan unexpectedly refrained from adding to stimulus at a policy review. The MSCI Asia Pacific excluding Japan Index dropped 1.1 percent as of 7:08 a.m. London time, its biggest loss in a month. Benchmarks in Singapore, Sydney fell by more than 1 percent. The yield on Australia’s 10-year government bonds fell four basis points to a three-week low of 2.43 percent, after the rate on similar-maturity U.S. Treasuries slid eight basis points on Tuesday to 1.80 percent. The latter was little changed on Wednesday.
The cost of insuring corporate and sovereign bonds in the Asia-Pacific region rose to about the highest level in three weeks, according to Societe Generale SA prices for the Markit iTraxx Asia index of credit-default swaps.
Global stocks’ rebound from a three-year low in February suffered a setback over the past two weeks as economic reports and corporate earnings underwhelmed investors. U.K. manufacturing unexpectedly shrank for the first time in three years in April, while China’s weakened, reports indicated on Tuesday.