Asian Equities Fall Amid Geopolitical Concerns, Yen Strengthens
Asian equities declined on Thursday as concerns over a shift in US foreign policy priorities weighed on risk sentiment, leading to a strengthening of the Japanese yen.
Risk Aversion Rises
* Asian shares dropped by 0.6%, with Chinese technology stocks in Hong Kong experiencing a significant downturn of up to 3.6% after a recent surge to their highest levels in three years.
* US President Donald Trump has intensified pressure on Ukraine for a peace accord with Russia, sparking worries among European allies that he may abandon years of support for the nation.
* Trump's proposed 25% tariff on lumber added to market uncertainty.
Yen Gains Ground
* The Japanese yen strengthened to its highest level against the US dollar since December on speculation that the Bank of Japan may raise interest rates sooner than anticipated.
* Japan's inflation data is expected to be released on Friday.
War in Ukraine
* The conflict in Ukraine continues to dominate European markets, with officials expressing anger over their exclusion from US-Russia talks in Saudi Arabia.
* Trump referred to Ukrainian President Volodymyr Zelenskiy as a "dictator" and demanded a rapid settlement.
Bond Market and Fed Minutes
* Bond traders are awaiting details of potential defense funding measures in Europe.
* Federal Reserve minutes released on Wednesday indicated that policymakers are prepared to maintain interest rates amid inflation and economic policy uncertainties.
* The Fed is also considering pausing or slowing the reduction of its balance sheet until the government's debt ceiling issue is resolved.
Commodities
* Oil prices dipped due to an industry report indicating an increase in US crude stockpiles and ongoing uncertainties surrounding global supply.
* Brent crude fell below $76 per barrel after a three-day climb.
* Lenovo Group's quarterly profit exceeded projections, demonstrating the impact of AI infrastructure spending on the PC market.
Key Market Movements
Stocks
* S&P 500 futures: -0.3%
* Nikkei 225 futures: -1.3%
* Hang Seng: -0.9%
* Euro Stoxx 50 futures: 0.1%
Currencies
* Bloomberg Dollar Spot Index: -0.2%
* Euro: $1.0431
* Japanese yen: 150.33 per dollar
Cryptocurrencies
* Bitcoin: $97,122.61
* Ether: $2,736.9
Bonds
* 10-year Treasury yield: 4.51%
Commodities
* West Texas Intermediate crude: $71.88 per barrel
* Spot gold: $2,944.92 per ounce