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EsAsian stocks fall as Brent tops $100; dollar and yields climb
Asian shares fell as Brent crude topped $100 a barrel after Red Sea attacks on Saudi tankers and Iran’s near-closure of the Strait of Hormuz, lifting bond yields and the U.S. dollar.
Asian stocks fell on Friday as oil prices climbed back above $100 a barrel, reinforcing concerns about inflation and interest rates. Bond yields stayed near multi-year highs and the dollar firmed.
Brent crude traded around $100.85 after spiking as much as 7% to $102, putting its gain for the month near 40%. The increase followed attacks on Saudi tankers in the Red Sea and Iran’s near-closure of the Strait of Hormuz, two sea lanes that handle a large share of global energy shipments. Two weeks after an interim truce collapsed, the U.S. military carried out air strikes on Iran into Friday morning, and Tehran fired at neighboring Arab countries that host U.S. bases.
A broad Asia-Pacific equity gauge slipped about 1%. Japan’s main index fell 2.9%, and South Korea’s market lost 3.7%. Nasdaq futures edged higher by 0.1% after results from Intel, while U.S. stocks had ended lower the prior session as Alphabet and Tesla reported heavy cash spending on AI infrastructure.
In bonds, the U.S. 10-year Treasury yield held near 4.70% after touching an 18‑month high of 4.703%. The 30‑year yield was steady at 5.17%, just below a 19‑year peak of 5.201%. European benchmark yields rose to levels last seen in 2011.
In currencies, the U.S. dollar index hovered near 101.46 after a 0.3% rise overnight. The yen traded around 163.89 per dollar, close to a 40‑year low. The U.S. Treasury flagged that excess volatility in the yen was undesirable. Japan’s finance minister has warned of possible action after yen‑buying operations in April and May when the exchange rate weakened beyond 160 per dollar.
Higher energy costs shifted rate expectations. Market pricing reflected roughly a one‑in‑three chance of a Federal Reserve rate increase next week, with a move by September fully priced. The European Central Bank kept rates unchanged, while markets assigned about a 70% chance of a hike in September. The approaching Fed meeting also puts attention on how FOMC decisions move markets, as changes in rate expectations affect the dollar, bonds, equities and commodities.
Price pressures were further affected by plans from the U.S. administration to raise tariffs on imports from 60 trading partners, a policy that could lift costs for a range of goods.
Nigel Green, CEO of deVere Group, warned that “Two of the world’s busiest shipping corridors are under threat in the same month, and markets are only just beginning to work out what that means.”
Tony Sycamore at IG viewed efforts to prop up the yen as “akin to standing in the way of a bullet train,” pointing to higher energy prices, firmer Fed expectations and the currency’s weaker safe‑haven appeal.
