Hong Kong stocks plunged by over 3% following a weeklong rally where they surged more than 20%.
Meanwhile, Japanese shares rebounded after a volatile few days in Tokyo. The rally came after new Prime Minister Shigeru Ishiba eased speculation about an interest rate hike.
The U.S. dollar strengthened against the Japanese yen, which helped lift Tokyo’s Nikkei 225 index by 2.2% to 38,655.03. The dollar rose to 146.80 yen, compared to 146.41 yen late Wednesday.
Previously, the dollar was trading around 142 yen after the ruling Liberal Democrats selected Shigeru Ishiba to succeed Fumio Kishida as prime minister. Ishiba had voiced support for the central bank’s recent decision to raise its near-zero benchmark interest rate, currently around 0.25%, leading traders to anticipate an appreciation in the yen.
However, after a meeting between Ishiba and Bank of Japan Governor Kazuo Ueda, both leaders signaled that further rate hikes were not considered appropriate for the economy at this time. This triggered a wave of yen selling.
Elsewhere in Asia, markets rose, with Sydney, Singapore, Wellington, Manila, and Jakarta all posting gains.
On Wall Street, the Dow Jones Industrial Average edged up 0.1% to 42,196.52, the S&P 500 closed flat at 5,709.54, and the Nasdaq Composite increased by 0.1% to 17,925.12.
In the bond market, the yield on 10-year U.S. Treasury notes climbed to 3.78%, up from 3.74% on Tuesday.
