Asian Stocks Bounce off, Bonds, China Markets Steady


Asian stocks bounced back from a twomonth low on Wednesday after global bond yields eased following a wellreceived U.S. debt auction and as Chinese shares found a footing after recent steep falls on policy tightening worries.

A recent selloff in global bonds has unsettled markets generally as concerns central banks could begin tightening the monetary spigot pushed yields higher, sparking worries higher borrowing costs could derail a fragile global economic recovery.

Japans Nikkei was little changed while MSCIs exJapan AsiaPacific shares index rose 0.2, a day after it hit a twomonth low. The CSI300 index of mainland Chinas Ashares rose 0.4.

Despite this, European and U.S. shares eased slightly as investors remained nervous about a bond bear run ahead of key inflation data and bond auctions in the United States.

Euro Stoxx 50 futures fell 0.3, while Britains FTSE futures traded 0.7 lower.

Gains in Asian stocks came after Chinese shares had fallen to their lowest levels since midDecember the previous day on the prospect of tighter policy and a slowing economic recovery.

Markets are giving full attention to bonds. As earnings are not growing that fast right now, the lofty stock prices we have now will become unsustainable if bond yields rise further and undermine their valuation, said Hiroshi Watanabe, senior economist at Sony Financial Holdings.

The yield on benchmark 10year notes slipped to 1.540, having peaked at 1.626 on Friday, after Tuesdays auction of 58…


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