---
title: "Bond yields decline as Asian stocks fluctuate: markets wrap"
description: "Treasuries and major equity benchmarks advanced in Asian trading, with Japan an exception as a stronger yen provided a headwind for local shares."
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/2024-10-25-bond-yields-decline-as-asian-stocks-fluctuate-markets-wrap/"
published: "2024-10-25T05:36:05"
updated: "2024-10-25T05:36:07"
lang: "en-ZA"
word_count: 525
---

# Bond yields decline as Asian stocks fluctuate: markets wrap

> Treasuries and major equity benchmarks advanced in Asian trading, with Japan an exception as a stronger yen provided a headwind for local shares.

By Bloomberg · Published 25 October 2024, 07:36 SAST · Updated 25 October 2024, 07:36 SAST

## Key points
- As Asian markets danced to the upbeat tunes of Chinese and Hong Kong shares, the US stock scene wobbled on the back of Tesla's dazzling earnings, while traders wrestled with the looming specter of a presidential election and the Fed's rate cut conundrum, all while Japan braced for a potential political shake-up that could send the yen into a tailspin.
- Mainland China, Hong Kong, Australia, and South Korea shares rallied, offsetting Japan's decline and keeping MSCI's Asian index stable.
- US Treasury yields fell as traders recalibrated expectations for rate cuts ahead of the presidential election, while the dollar remained steady.
- Economic data next week is expected to clarify market direction, with polls indicating a tight race between Trump and Harris in swing states.
- Japan's upcoming election poses risks for the yen and stocks, while TSMC reports strong early production yields at its Arizona plant.

## Content

Mainland China and Hong Kong shares rallied alongside those in Australia and South Korea. The moves offset Japan’s slide to keep MSCI’s Asian index flat. US futures were little changed after the S&P 500 rose 0.2% and the Nasdaq 100 climbed 0.8%. The moves partly reflected the 22% leap for Tesla Inc. shares on strong earnings and forecast.

Treasury yields fell for a second day as traders reassessed bets on US rate cuts and risks from the upcoming presidential election. Yields for Australian and New Zealand bonds also declined. The dollar was steady, on track for a fourth straight weekly gain.

A surge in Treasury yields earlier in the week had led to risk-off moves across markets, as traders scaled back expectations for Federal Reserve rate cuts. Economic data next week will provide more clarity, while polls show a tie between Donald Trump and Kamala Harris in swing states.

“After the election we are still expecting the dollar index to trend lower because we expect the Fed will further cut interest rates no matter who wins,” said Carie Li, global market strategist, DBS Bank Hong Kong, speaking on Bloomberg Television.

The yen held gains from Thursday against the dollar ahead of the weekend’s election that may see Japan’s ruling coalition lose its majority in the lower house of parliament for the first time since 2009. Such an outcome would [weaken the yen](https://www.bloomberg.com/news/articles/2024-10-24/japan-s-cliffhanger-election-risks-sending-the-yen-stocks-lower) and Japanese stocks, according to strategists.

US stocks and bonds had advanced on Thursday as US economic data showed new home sales beating estimates, initial jobless claims [dropping](https://www.bloomberg.com/news/articles/2024-10-24/us-initial-jobless-claims-drop-amid-volatility-after-hurricanes) and business activity [expanding](https://www.bloomberg.com/news/articles/2024-10-24/growth-in-us-business-activity-picks-up-on-strength-in-services) at a solid pace.

The “Goldilocks” data that was broadly in line with forecasts “is the best outcome for a continued rebound in stocks and bonds”, said Tom Essaye at The Sevens Report.

In Japan, Governor Kazuo Ueda [signalled](https://www.bloomberg.com/news/articles/2024-10-24/boj-s-ueda-signals-no-hike-next-week-noting-time-is-on-his-side) the central bank won’t hike interest rates next week, with almost all BOJ watchers already expecting no policy shift this month. Ueda spoke ahead of the nation’s election this weekend and after the yen slid to the lowest level since 31 July against the dollar earlier this week.

Elsewhere in Asia, China’s recent barrage of fiscal measures fall short of what’s [needed to address](https://www.bloomberg.com/news/articles/2024-10-24/china-fiscal-pack-insufficient-to-curb-deflation-risks-imf-says) deflationary risks, according to one senior International Monetary Fund official. The central government “has to spend” more to address the property crash and ease price pressures, according to Krishna Srinivasan, the organisation’s Asia-Pacific department chief.

In a positive sign for Taiwan Semiconductor Manufacturing Co., it has [achieved](https://www.bloomberg.com/news/articles/2024-10-24/tsmc-s-arizona-chip-production-yields-surpass-taiwan-s-a-win-for-us-push) early production yields at its first plant in Arizona that surpass similar factories in its home base.

Money markets are [currently pricing](https://www.bloomberg.com/news/articles/2024-10-24/us-treasuries-rebound-as-market-takes-break-from-days-of-losses) about an 85% chance the Fed will cut rates by a quarter-point next month, and around 135 basis points of easing by the end of 2025.

“Investors see the resiliency of the economy and employment forcing the Fed to be ‘slower to lower’ on rates,” said Sam Stovall at CFRA, who anticipates two 25 basis-point cuts in 2024.

In commodities, oil advanced after dropping Thursday as oversupply concerns overshadowed the risks from Israel’s potential retaliatory strike on Iran. Gold edged lower on Friday after rising in the prior day.