Asian Shares Slip As US Wall St tumbles on debt woes

Tokyo: Asian shares fell Thursday after Wall Street slumped under pressure from the Treasury bond market and worries about surging US debt. US futures were little changed, while Japan's benchmark Nikkei 225 shed 1.0 per cent in afternoon trading to 36,944.55. Hong Kong's Hang Seng lost 0.9 per cent to 23,615.21, while the Shanghai Composite edged down 0.1 per cent to 3,383.10. Australia's S&P/ASX 200 slipped 0.5 per cent to 8,342.80. South Korea's Kospi dropped 1.1 per cent to 2,595.69.

Rising yields for US Treasury bonds are a canary in the coal mine, Stephen Innes of SPI Asset Management said in a commentary. “The US still has the biggest markets, the deepest liquidity, and the dollar's inertia working in its favour. But even inertia can't outrun compound interest and structural deficits forever,” he wrote.

The declining US dollar also weighed on regional markets, according to some analysts, because some Asian nations have significant holdings in dollars. A weak dollar also hurts Asian exporters, such as Japanese automakers and electronics companies, by reducing the value of their overseas earnings when they are converted into Yen. In currency trading, the US dollar fell to 143.27 Japanese Yen from 143.68 Yen. It had been trading at 150 Yen levels a year ago. The euro cost $1.1335, up from $1.1330.

Investors remain worried over President Donald Trump's actions, including tariff policies that directly affect Asian companies and decisions on major legislation such as a funding bill now in Congress. “US equities slumped in a Sell America' move as things turned ugly on Trump's big, beautiful tax bill.'” said Tan Jing Yi, analyst at Mizuho Bank in Singapore.

On Wednesday, shares tumbled on Wall Street after the US government released the results for its latest auction of 20-year bonds.