Asian Shares Mostly Lower On Inflation, Rate Concerns

(RTTNews) - Asian stocks retreated on Thursday, even as Japan's Nikkei rose notably as Tokyo markets reopened after a three-day holiday.

A cautious undertone prevailed after oil prices rose sharply overnight and U.S. bond yields jumped to their highest levels in nearly two decades on inflation concerns stemming primarily from surging global energy prices amid the prolonged West Asia conflict.

The U.S. dollar index clung to a two-month high as a strong manufacturing reading prompted traders to reprice their rate-hike bets.

Markets currently price in a 55 percent chance of a Federal Reserve rate hike next month, according to the CME's FedWatch tool.

The U.S. 10-year Treasury yield held steady after reaching the highest since 2007 overnight.

Gold was subdued below $4,300 an ounce while Brent crude prices traded above $103 a barrel, after having rising 4 percent in the previous session due to heightened uncertainty surrounding U.S.-Iran negotiations.

China's Shanghai Composite index fell 1.22 percent to 3,888.37, with technology stocks coming under renewed selling pressure ahead of the closely watched Trump-Xi summit. Hong Kong's Hang Seng index dipped 0.29 percent to 24,761.13.

After an unscheduled meeting with Chinese Vice Premier He Lifeng, U.S. Treasury Secretary Scott Bessent announced the extension of Busan trade truce from November 10 to January 10, easing the immediate risk of a renewed escalation in tariffs between the world's two largest economies.

Japanese markets closed notably higher as gains in chip-related shares outweighed concerns over climbing bond yields and oil prices.

Japanese 10-year government bond yield rose to a 30-year high today, following the Bank of Japan's policy rate increase to 1.25 percent and a surge in U.S. Treasury yields.

The Nikkei average surged 0.76 percent to 65,513.99 as trading resumed after a three-day holiday. The broader Topix index settled 0.39 percent lower at 4,075.30.

Ibiden shares soared 14.6 percent and Socionext jumped 15 percent after Meta's new personal AI agent Muse made an unusually strong consumer debut and Alibaba unveiled a new processor for artificial intelligence, calling it the most powerful Chinese AI chip.

Seoul markets were closed for Chuseok Thanksgiving Day holiday. Australian markets fell notably after labor market showed mixed signs in August, with employment growth exceeding expectations and the jobless rate climbing to a five-year high.

The benchmark S&P/ASX 200 dropped 0.72 percent to 8,702 ahead of the Reserve Bank of Australia's Sept. 29 policy decision, with markets factoring in a 25-bps rate hike. The broader All Ordinaries index ended 0.66 percent lower at 8,897.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 index finished marginally higher at 13,824.83 following losses in the previous session.

U.S. stocks ended lower overnight while oil and bond yields rose, rekindling inflation and interest-rate concerns.

Oil prices jumped around 4 percent to snap a five-day losing streak after U.S. President Trump threatened to 'annihilate' Iran and Iranian President Masoud Pezeshkian condemned what he called "signs of a bullying mentality" from the U.S. and said that Iran would never surrender but believes in diplomacy.

Earlier in the day, Iran's security chief Mohsen Rezaei said the Strait of Hormuz would not be reopened while Iran's conditions are not met.

The 10-year Treasury yield jumped 0.17 percentage point to 5.13 percent, its highest level since July 2007 and marking its biggest single-day rise since May, driven by a weak Treasury auction and a surprisingly strong report showing rising private-sector business activity and price pressures.

The Dow dropped 0.7 percent, the tech-heavy Nasdaq Composite declined 1.1 percent and the S&P 500 gave up 0.8 percent.