MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.7%, and Japan’s Nikkei declined 0.8%, after a 20% strong rally in the first quarter
Asian shares followed Wall Street lower on Wednesday as U.S. yields stood near four-month highs, while a powerful earthquake in the region raised concerns about possible disruptions to the vital chip-making industry.
Europe is set for a subdued open, with EUROSTOXX 50 futures little changed and FTSE futures dropping 0.3%. Wall Street stock futures were 0.2% lower as investors weighed the risk of fewer rate cuts ahead of an appearance from Fed Chair Jerome Powell and U.S. services and jobs figures due later in the day.
In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.7%. Japan’s Nikkei declined 0.8%, after a 20% strong rally in the first quarter.
Taiwan’s shares slid 0.5% after an earthquake hit the island.
Taiwan makes up around 90% of chipmaker TSMC’s production. The group’s shares dropped 0.9% after it said some facilities were evacuated following the quake. It later said evacuated employees were beginning to return to work.
China’s blue chips dropped 0.2% while Hong Kong’s Hang Seng index shed 0.8%, even as a private sector survey showed the expansion in the services industry accelerated in March.
On Wall Street, a recent run of solid U.S. economic data – including an unexpected expansion in the manufacturing sector and the slow easing in the labour market – has stoked doubts about the amount of the Fed easing likely this year and next.
A pair of Fed policymakers on Tuesday said they think it would be “reasonable” to trim U.S. interest rates three times in 2024, but markets only see around 69 bps in easing.
