Asia report: Stocks mixed as investors keep watch on bond yields

In Japan, the Nikkei 225 was up 0.99% at 29,027.94, as the yen strengthened 0.07% against the dollar to last trade at JPY 108.81.

Of the major components on the benchmark index, robotics specialist Fanuc and Uniqlo owner Fast Retailing were both weaker, by 0.8% and 0.28% respectively, while technology giant SoftBank Group gained 3.18%.

Carmakers and banks were also on the front foot, with Honda Motor up 3.68%, Mitsubishi UFJ Financial 2.86% firmer, and Toyota Motor 2.86% higher.

The broader Topix index was 1.27% firmer by the end of trading in Tokyo, closing at 1,917.68.

On the mainland, the Shanghai Composite was down 1.82% at 3,359.29, and the smaller, technology-centric Shenzhen Composite lost 2.84% to settle at 2,160.91.

South Korea’s Kospi was 0.67% weaker at 2,976.12, while the Hang Seng Index in Hong Kong managed gains of 0.81% to 28,773.23.

The blue-chip tech stocks were mixed in Seoul, with Samsung Electronics down 0.73%, as SK Hynix gained 0.74%.

Among the broader technology sector on the Korean peninsula, the mixed picture continued, as LG Electronics rose 1.05% while search engine company Naver was 1.9% lower.

Rising bond yields overnight continued to cause consternation among equity investors, as the 10-year US Treasury note climbed above 1.55% during the Asian session.

“Sector rotation is still very much the name of the game among investors as they want the biggest bang for their buck,” said Avatrade chief market analyst Naeem Aslam.

“Traders know that the upcoming US stimulus package is going to strengthen the US economic recovery, and this has made them to back value stocks.”

Aslam noted that many were still concerned about the long-term borrowing cost creeping higher, which could be a threat for equities.

“But, it is also a reality that interest rates are never going to stay at their ultra-low levels forever and traders need to be aware of this.”

Oil prices were higher as the region went to bed, with Brent crude last up 1.22% at $69.07 per barrel, and West Texas Intermediate adding 1.17% to $65.81.

In Australia, the S&P/ASX 200 was ahead 0.47% at 6,771.20, as the hefty financials subindex rose 0.95%.

Among the country’s big four banks, Australia and New Zealand Banking Group was up 1.32%, Commonwealth Bank of Australia added 0.65%, National Australia Bank advanced 0.83%, and Westpac Banking Corporation was 0.73% higher.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was 0.5% firmer at 12,145.15, led higher by cinema technology company Vista Group, which leapt 5.3% as investors held on for a reopening of movie theatres globally during 2021.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.65% at AUD 1.2990, and the Kiwi 0.54% firmer at NZD 1.3964.