Asian Shares Decline On Rising Bond Yields, Tariff Uncertainties

(RTTNews) - Asian stocks fell broadly on Wednesday, with rising bond yields, tariff-related uncertainties and caution ahead of key U.S. employment data due later in the week keeping investors on edge.

China's Shanghai Composite index ended down 1.16 percent at 3,813.56, with defense-related shares taking a major hit as a massive military parade in central Beijing concluded.

Hong Kong's Hang Seng index dropped 0.60 percent to 25,343.43 despite a measure of China's services activity growth reaching a 15-month high in August.

Japanese markets ended notably lower after data showed Japan's service sector growth moderated in August. Investors also reacted to reports suggesting that the ruling party is set to call for early party elections.

The Nikkei average fell 0.88 percent to 41,938.89, led by declines in financial stocks after a rise in 30-year bond yield. The broader Topix index tumbled 1.07 percent to 3,048.89. Mitsubishi UFJ Financial Group and Mizuho Financial Group both plummeted over 3 percent.

Seoul stocks ended modestly higher, led by semiconductors and pharma stocks. The Kospi average edged up by 0.38 percent to 3,184.42. Samsung Electronics gained 1 percent, SK Hynix rose 0.8 percent and Samsung Biologics advanced 1.5 percent.

Australian markets declined for the fourth consecutive day as surging global bond yields coupled with stronger GDP data following subdued growth in the March quarter ruled out an RBA rate cut in September.

Data showed Australian GDP grew an annual 1.8 percent in the June quarter, higher than the 1.6 percent expected by analysts. The benchmark S&P/ASX 200 slumped 1.82 percent to 8,738.80, marking its biggest single day drop since April.

The broader All Ordinaries index settled 1.72 percent lower at 9,010.10 amid broad-based selling. Tech stocks bore the brunt of the selling, with accounting software provider Xero plummeting 6.2 percent.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 index dipped 0.44 percent to 13,074.81, closing lower for the first time in five days. Ebos and A2 Milk fell 2-3 percent.

The dollar rose in Asian trading on risk-off sentiment as investors grappled with rising bond yields and renewed trade uncertainty.

Gold hovered near record levels at $3,535 per ounce on Fed rate-cut bets. Oil edged lower after rising more than 1 percent in the previous session following U.S. sanctions on a network of companies and vessels transporting Iranian oil.

Overnight, Wall Street kicked off September on a sour note due to rising pressure from the bond market and weak data, with U.S. factory activity contracting in August for a sixth straight month, impacted by import tariffs.

The 10-year Treasury yield climbed to 4.27 percent from 4.23 percent and the 30-year yield climbed back toward 5 percent as President Trump's bid to fire Fed Governor Lisa Cook raised alarms over central bank independence and a court ruling challenged Trump-era tariffs.

The tech-heavy Nasdaq Composite ended 0.8 percent lower, after having slumped nearly 1.5 percent earlier. The S&P 500 declined 0.7 percent and the Dow dipped 0.6 percent.