Asian shares advance after a retreat on Wall Street

Asian stock markets largely experienced gains on Tuesday following a pullback in U.S. equities, which retreated from last week’s rally amid concerns over rising global bond yields. Tokyo’s Nikkei 225 index increased by 0.5% to close at 49,534.36, with financial sector shares leading the advance after signals from the Bank of Japan governor hinted at a potential interest rate hike later this month. In Hong Kong, the Hang Seng rose 0.7% to 26,209.07, while the Shanghai Composite slipped 0.3% to 3,902.78. Australia’s S&P/ASX 200 edged up 0.2% to 8,582.80. South Korea’s Kospi saw a robust 1.5% gain, driven by technology stocks, including Samsung Electronics which surged 2.8%, and chipmaker SK Hynix, which climbed 3.4%. Taiwan’s Taiex benchmark advanced 1%, whereas India’s Sensex dipped slightly by 0.1%. On Wall Street, the S&P 500 ended Monday with a 0.5% decline at 6,812.63, snapping a five-day winning streak. The Dow Jones Industrial Average dropped 0.9% to 47,289.33, and the Nasdaq Composite fell 0.4% to 23,275.92. Last week’s positive momentum was largely driven by expectations that the Federal Reserve would cut its key interest rate to support a cooling labor market. However, at U.S. manufacturers, job pressures persist, with many firms prioritizing headcount management over new hiring amid ongoing tariff-related complications. Supply chain uncertainties were reported to be more challenging than during the peak of the coronavirus pandemic, according to an Institute for Supply Management (ISM) survey. Global bond yields have trended upward, influenced by comments from the Bank of Japan Governor Kazuo Ueda, who suggested the central bank might raise its near-zero benchmark interest rate, a policy it has maintained for years to stimulate sluggish economic growth. Inflation in Japan has remained above the Bank’s 2% target, prompting speculation of earlier-than-expected tightening. This prospect has unsettled global bond and equity markets, although some analysts, such as Thomas Mathews from Capital Markets, believe markets can withstand further monetary tightening. Higher bond yields typically divert investor interest away from equities and cryptocurrencies, as elevated fixed-income returns offer more attractive, lower-risk alternatives. This trend contributed to a sharp decline in Bitcoin’s price, which fell from around $125,000 in October to near $85,500, down approximately 6% from the previous day. Cryptocurrency-related stocks also suffered losses, with Coinbase Global dropping 4.8% and Robinhood Markets shedding 4.1%. On the positive side of the U.S. market, Synopsys shares gained 4.9% after announcing a $2 billion investment from Nvidia as part of an expanded partnership, while Nvidia itself rebounded to close 1.6% higher, despite early losses. Retail sentiment showed mixed outcomes during the early holiday shopping season. Consumer spending over Black Friday and Cyber Monday reportedly exceeded expectations despite uncertainties around the U.S. economic outlook. Shares of Williams-Sonoma rose 1.3%, whereas Best Buy declined 2.6%. In Europe, France’s CAC 40 fell 0.3%, weighed down by Airbus, which dropped 5.8% following a weekend software glitch affecting its A320 aircraft fleet. Airlines scrambled to deploy software patches to minimize disruption. Energy markets saw minor fluctuations, with U.S. crude oil rising 2 cents to $59.34 per barrel, while Brent crude slipped 4 cents to $63.13. Currency markets witnessed the dollar strengthen against the Japanese yen, moving from 155.41 to 155.61, and the euro marginally appreciated to $1.1612 from $1.1608.