SINGAPORE — Stocks in Asia-Pacific looked set for a lower start on Wednesday after overnight losses on Wall Street as the S&P 500 plunged deeper into bear market territory.
Investors in the region will also be eagerly awaiting the release of Chinese economic data expected later today.
Futures pointed to a weaker open for Japanese stocks, with the Nikkei futures contract in Chicago at 26,470 while its counterpart in Osaka was at 26,420 – lower than the Nikkei 225’s last close at 26,629.86 .
Australian shares also looked set to open lower, with the SPI futures contract at 6,637, versus the S&P/ASX 200’s last close at 6,686.
A slew of Chinese economic data, including industrial production and retail sales for May, is expected to be released later Wednesday.
Overnight on Wall Street, the S&P 500 fell deeper into bear market territory, down 0.38% to 3,735.48. The Dow Jones Industrial Average fell 151.91 points, or 0.5%, to 30,364.83. The tech-heavy Nasdaq Composite outperformed, rising 0.18% to around 10,828.35.
The moves in the U.S. came as U.S. Treasury yields rose again as investors anticipate more aggressive tightening policies from the Federal Reserve, which is expected to announce its latest interest rate decision. later Wednesday in the United States.
The benchmark 10-year Treasury yield last stood at 3.4791%, while the 2-year rate was at 3.4393%. Yields move inversely to prices. The 2-year and 10-year Treasury yield curves inverted briefly recently as investors positioned themselves for a potentially aggressive tightening of monetary policy to keep inflation under control.
The inversion of the yield curve is closely watched by traders and is often seen as an indicator of a possible recession to come.
The Japanese yen was trading at 135.27 to the dollar, weaker from the sub-135 levels seen against the greenback yesterday. The Aussie dollar changed hands at $0.6881, struggling to recover from last week’s fall from levels above $0.72.