Stocks in Asia followed their American counterparts lower as geopolitical developments and rising benchmark U.S. yields spurred a return of risk aversion.
Equities in Japan and Korea were lower after U.S. stocks halted a four-day rally with the steepest slide in almost two weeks. Australian shares bucked the trend. Earlier, yields on 10-year Treasury notes rose to 3.07 percent, the highest since 2011, after upbeat U.S. retail sales data fueled bets the Federal Reserve may raise interest rates three more times this year. Bloomberg’s dollar index steadied close to a 2018 high. In emerging-markets, equities dropped the most since March and currencies slumped the most in a year.
Risk aversion spread across asset classes as investors — already uncomfortable with rising yields and a strong dollar — grappled with trade, growth, and geopolitical worries. Fresh uncertainty about the U.S.-North Korea summit, violence in the Middle East, the U.S.-China trade spat, and global growth concerns are fueling negative sentiment.