Asian stocks followed their U.S. counterparts lower as worries about the earnings outlook weighed on industrial and technology shares. The 10-year Treasury yield climbed to a fresh high after piercing the 3 percent level for the first time in four years.
Shares from Tokyo to Hong Kong dropped. U.S. equities fell overnight as a slew of companies considered bellwethers for key pieces of the global economy warned on profit forecasts. The dollar steadied after coming off its highest since January, while crude climbed back toward $68 a barrel. The yen slipped to its lowest since early February. Australian equity and bond markets are shut for a holiday.
Investors are weighing the implications of climbing bond yields that have been spurred in part by higher commodity prices and concern surrounding their inflationary impact on the wider economy. But volatility in interest-rate markets remains low and equity price swings are well off the highs seen earlier this year, indicating investors believe rising borrowing costs may not be enough to cause outsized pain to equities.
Elsewhere, Takeda Pharmaceutical Co. slumped the most in almost five years after the Japanese company increased its bid for Shire Plc to about 46 billion pounds ($64 billion), as the drugmakers sought more time to agree on a deal. — Bloomberg