Asia markets wobble amid interest rate concerns

The Dow Jones Industrial Average fell 1.14%, the S&P 500 lost 1.47% and the Nasdaq Composite dropped 1.57%.

In currencies, the dollar index, which tracks the greenback against a basket of currencies of other major trading partners, advanced 0.085% to 106.3, after hitting 106.21 on Tuesday, the highest since November 30. The European single currency was down 0.1% on the day at $1.0564, having lost 2.56% in a month.

The Japanese yen remained weak vs the greenback at 149.06 per dollar. The dollar’s strength against the yen in particular has kept traders on alert for an intervention to prop up the Japanese currency, especially after finance minister Shunichi Suzuki said no options were off the table.

The 150 yen per dollar level is seen by financial markets as a red line that would spur Japanese authorities to act, as they did last year.

“USD/JPY traded in a fairly narrow range overnight and is now trading just above 149. Higher US treasury yields and recent dovish comments from [the] Bank of Japan [BOJ] officials have weighed on USD/JPY,” CBA analysts said in a note. “We see a high risk the BOJ intervenes soon to prop up the JPY.”

In treasuries, benchmark 10-year treasury yields have climbed to 16-year highs in the wake of the Fed’s hawkish longer-term rate outlook last week. The yield reached 4.5274% on the day, compared with its US close of 4.558% on Tuesday.

The two-year yield, which rises with traders’ expectations of higher Fed fund rates, touched 5.0603% compared with a US close of 5.077%.

Oil prices settled higher after reaching a two-week low earlier in Tuesday’s session, as investors weighed expectations of tighter supply against demand concerns stemming from an uncertain economic outlook.

US crude ticked up 0.34% to $90.7 a barrel. Brent crude rose to $94.26 a barrel.

Gold was slightly higher. Spot gold was traded at $1901.204 per ounce.

Reuters