--- title: "Asia stocks fall after Fed minutes, led by China: markets wrap" description: "Stocks in Asia dropped following weakness on Wall Street after Federal Reserve meeting minutes indicated interest rates will remain elevated for longer." type: "NewsArticle" publisher: "Daily Maverick" site: "https://www.dailymaverick.co.za" section: "Business Maverick" author: "Bloomberg" author_url: "https://www.dailymaverick.co.za/author/bloomberg/" canonical_url: "https://www.dailymaverick.co.za/article/2024-01-04-asia-stocks-fall-after-fed-minutes-led-by-china-markets-wrap/" published: "2024-01-04T06:05:59" lang: "en-ZA" word_count: 646 --- # Asia stocks fall after Fed minutes, led by China: markets wrap > Stocks in Asia dropped following weakness on Wall Street after Federal Reserve meeting minutes indicated interest rates will remain elevated for longer. By Bloomberg · Published 4 January 2024, 08:05 SAST ## Key points - Daily Maverick: As regional benchmarks slid, US stock futures clawed back some ground while Chinese stocks took a hit on news of falling wages and the offshore yuan steadied amid speculation of monetary easing. - Regional shares slid on first trading day of new year - US stock futures gain slightly in Asia - Chinese stocks among top losers as wages decline - Geopolitical tensions support crude prices ## Content A gauge for regional shares slid for a third straight session as benchmarks slid from Australia to South Korea, with China leading the declines. Japan’s Topix Index turned flat following early losses on the first trading day of the new year after a holiday break. US stock futures gained slightly in Asia after the S&P 500 ended on Wednesday 0.8% lower, extending a run of daily declines that began on the last trading day of 2023. The Nasdaq 100 fell 1.1%, a fourth daily drop, and the longest losing streak in two months. Attention will now turn to upcoming US jobs data on Friday after minutes from the Fed’s December meeting suggested rates could remain at restrictive levels “[for some time](https://www.bloomberg.com/news/articles/2024-01-03/fed-sees-rates-staying-high-for-some-time-with-cuts-eyed-in-24)”. Swaps traders have been reining in their bets on rate cuts after factoring in a full quarter point cut to the benchmark rate by the March meeting. “The risk rally calls for a breather,” according to Jun Rong Yeap, market strategist at IG Asia Pte. “The unwinding of extreme bullish sentiments in Wall Street, a firmer US dollar and higher oil prices may be a drag for Asian equities.” Chinese stocks were among the top losers in Asia, with the CSI 300 benchmark down 1.4%, following a report that showed [wages](https://www.bloomberg.com/news/articles/2024-01-03/china-s-workers-suffer-biggest-drop-in-hiring-salaries-on-record) offered to Chinese workers in major cities declined by the most on record. The selling came even as a private [gauge](https://www.bloomberg.com/news/articles/2024-01-04/china-s-services-sector-rises-in-december-private-survey-shows) of the country’s services activity climbed to the highest in five months in December. Meanwhile, Chinese government bond yields [fell](https://www.bloomberg.com/news/articles/2024-01-04/china-s-10-year-yield-hits-lowest-since-2020-on-easing-hopes) to the lowest in more than three years. The offshore yuan was steady. The People’s Bank of China weakened Wednesday’s currency fixing by the most in over six months, a sign policymakers may have shifted their focus from stabilizing the currency to monetary easing. The country’s finance minister [said](https://www.bloomberg.com/news/articles/2024-01-04/china-s-fiscal-spending-will-rise-this-year-finance-chief-says) government spending will rise this year. “There is a lot of activity going on in China that we don’t really see if we focus on the mega-cap tech names or the real estate names,” Vikas Pershad, Asian equities portfolio manager for M&A Investments, said on Bloomberg Television. “We do see a market where there is the opportunity for relative outperformance but also absolute performance.” In currencies, a gauge measuring dollar strength edged higher after advancing for a fourth straight session Wednesday, its best run since November. The yen traded around 143 per dollar after weakening almost 1% against the greenback in the prior session. The Japanese currency is coming under renewed [pressure](https://www.bloomberg.com/news/articles/2024-01-04/earthquake-may-raise-hurdle-for-boj-to-end-negative-interest-rate-policy) as the recent powerful earthquake makes it harder for the central bank to abolish negative interest rates. Easing job openings Treasuries were mostly steady in Asia, following declines from one of the worst [opening days](https://www.bloomberg.com/news/articles/2024-01-02/stocks-bonds-drop-in-tandem-for-worst-start-to-year-in-decades) to a year on record. The 10-year Treasury yield inched one basis point lower to 3.9% Wednesday as the Fed minutes showed the possibility of slowing the pace of [quantitative tightening](https://www.bloomberg.com/news/articles/2024-01-03/markets-see-fed-s-qt-exit-nearing-as-minutes-reveal-early-talks). US [manufacturing data](https://www.bloomberg.com/news/articles/2024-01-03/us-factory-gauge-shows-14th-month-of-shrinking-activity) on Wednesday showed activity remained in contraction. Separate figures showed the number of [job openings](https://www.bloomberg.com/news/articles/2024-01-03/us-job-openings-eased-further-in-november-to-8-79-million) fell slightly in November from the prior month’s revised number in a sign of labor market softening. “Overall, the labour market remains strong, but demand is cooling, coming into better balance with supply,” Rubeela Farooqi, chief US economist at High Frequency Economics wrote. “These data will be welcome news for policymakers and support the Fed’s view that the next move in rates will be lower, likely in Q2.” Elsewhere, geopolitics remained in focus. Iran said [attacks](https://www.bloomberg.com/news/articles/2024-01-03/explosion-heard-in-iran-near-grave-of-slain-commander-soleimani) that killed almost 100 people in the country were carried out to punish its stance against Israel, intensifying tensions in the region. The tensions supported crude, which climbed further on Thursday. Oil prices were also buoyed by [supply disruptions](https://www.bloomberg.com/news/articles/2024-01-03/latest-oil-market-news-and-analysis-for-jan-3) in Libya and a statement from OPEC pledging to stabilise prices. Elsewhere, a slump in Bitcoin saw the cryptocurrency [erase almost all gains](https://www.bloomberg.com/news/articles/2024-01-03/bitcoin-btc-reverses-course-ahead-of-eagerly-awaited-etf-decision) it had made so far this year.