A selloff in global bonds resumed, weighing on Asian shares as risk appetite stayed subdued given the prospect of less aggressive Federal Reserve interest rate cuts.
Yields on 10-year Treasuries rose another three basis points after topping 4.2% for the first time since July earlier this week. Those on Japan’s 40-year notes also reached the highest in 16 years. A Bloomberg gauge of the dollar was up slightly, with the yen losing as much as 0.8%.
An index tracking Asian equities was flat, amid declines in Japan and gains in South Korea. US futures edged lower, while European contracts pointed to a steady open.
Hong Kong and mainland Chinese shares were outliers, rising after a top government-linked think tank called on authorities to issue 2 trillion yuan ($281 billion) of special government bonds to help create a market stabilization fund.
The broader risk-off tone comes as investors have pared back bets on rapid policy easing, on signs that the US economy remains robust and concerns about wider fiscal deficits after the presidential election.
