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(Bloomberg) — Benchmark Asian stocks were mixed on Wednesday, while U.S. stock futures rose after the S&P 500 snapped a four-day losing streak, providing a moment of respite for stocks and bonds in more than a decade.

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Benchmarks in Japan, China and Hong Kong traded between losses and gains. Australian stocks held on to steady gains, while European stock futures rose.

After its biggest one-day jump since 1998 when it rose nearly 4% against the dollar on Tuesday, the yen was partially lower on the back of an unexpected policy adjustment by the Bank of Japan. The impact of the BOJ’s surprise decision to sell 10-year government bond yields to 0.5% continues to reverberate.

The central bank announced a surprise bond purchase on Wednesday as the yield on 10-year debt neared a new high. Japan’s two-year government yield rose above zero for the first time since 2015. Treasury yields also edged higher in Asia after jumping 10 basis points for a second straight session on Tuesday.

Tuesday’s BOJ decision marks the beginning of a U-turn toward Japan to normalize its monetary policy, said Amy C. Patrick, head of fixed income strategy at Pendal Group Ltd. “They’re at the beginning of that journey,” he said in an interview. Bloomberg Television. “This is a course of action they should follow to send a message to forex speculators that the yen funding trade is not a one-way bet.”

Traders are wary of the prospect of Japanese institutions repatriating money held in foreign stocks and bonds. Japanese investors hold more than $3 trillion in foreign stocks and debt, roughly half of which is in the United States, according to data compiled by Bloomberg.

“The BOJ’s tighter policy will remove one of the last global anchors that has helped keep borrowing costs broadly low,” analysts at Deutsche Bank AG told clients, noting that the change came as markets were “already rattled.” From Fed and ECB meetings. last week.

Many economists now expect the BOJ to raise rates next year, joining the Fed, ECB and others after a decade of extraordinary stimulus.

Fresh data showing a cooling U.S. housing market gave some relief to the inflation outlook in a year marked by rapidly rising interest rates that weighed on stocks and bonds. Global stocks fell by a fifth in 2022, on pace for their worst year since 2008. Bloomberg’s index of world bonds fell 16%, the biggest annual decline since 1990.

This week’s main events:

  • US GDP, Initial Jobless Claims, US Conf. Department leading index, Thursday

  • US Consumer Income, New Home Sales, US Durable Goods, PCE Deflator, University of Michigan Consumer Sentiment, Friday

Some major movements in the markets.

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  • S&P 500 futures were up 0.3% as of 1:32 p.m. Tokyo time. The S&P 500 rose 0.1%

  • Nasdaq 100 futures rose 0.3%. The Nasdaq 100 fell 0.1%

  • Japan’s Topix fell 0.7%

  • Australia’s S&P/ASX 200 rose 1.3%

  • Hong Kong’s Hang Seng was little changed

  • The Shanghai Composite fell 0.1%

  • Euro Stoxx 50 futures rose 0.6%

Currencies

  • The Bloomberg Dollar Spot Index was little changed

  • The euro was down 0.1% at $1.0610

  • The Japanese yen fell by 0.3% to 132.17 per dollar.

  • The offshore yuan fell 0.2% to 6.9743 per dollar

Cryptocurrencies

  • Bitcoin fell 0.4% to $16,808.74

  • Ether fell 0.7% to $1,207.84

Bonds

  • The 10-year Treasury yield rose two basis points to 3.70%

  • Japan’s 10-year yield rose five basis points to 0.46%

  • Australia’s 10-year yield was little changed at 3.72%

goods

  • West Texas Intermediate crude was little changed

  • Spot gold fell 0.2% to $1,814.37 an ounce.

This story was produced with the help of Bloomberg Automation.

–Assisted by Rhea Rao.

(An earlier version of this story has been corrected to correct the spelling of Hong Kong in the second paragraph)

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