Asian stocks headed for a fourth day of declines as investors focused on inflation expectations and interest rates ahead of the Bank of Japan’s monetary policy decision later on Tuesday.
Stocks fell in China, South Korea and Australia, while Japanese stocks posted small gains. Reports of mounting unrest from the Covid outbreak continued to cause anxiety among investors in Hong Kong and the mainland.
US stock futures rose slightly after the S&P 500 closed Monday at its lowest level in more than a month. The benchmark index fell due to declines in major technology companies including Apple Inc. and Microsoft Corp. and Amazon.com Inc.
Investors, still jittery after recent upbeat comments from the Federal Reserve and other central banks, will be watching the Bank of Japan closely. While economists were unanimous in not expecting any change from the Bank of Japan on Tuesday, market speculation is growing about a future shift away from a policy of heavy losses, which would further support the yen.
The dollar has changed little and the yen has weakened.
Treasury bonds stabilized after the 10-year Treasury yield rose to the highest level since October on Monday. Yields rose in Australia. The 10-year Japanese government bond yield was unchanged at 0.25%, the top of the Bank of Japan’s target trading range.
In China, banks kept their benchmark lending rates, including the five-year rate that is considered a benchmark for mortgages, for the fourth month after the central bank kept its monetary policy unchanged last week.
Oil rose as investors weighed China’s pledge to revive consumption against broader lower risk sentiment, with the West Texas Intermediate above $75 a barrel.
However, global sentiment remained sour after former New York Federal Reserve Chairman and Bloomberg Opinion columnist William Dudley told Bloomberg TV on Monday that bull markets may only cause more central bank tightening.
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