Asian Shares Dive as US 2-Year Yield Hits 4.065% and Korea's Kospi Slides 5%

9 articles · Updated · Reuters · May 15

MSCI's Asia-Pacific index outside Japan fell 2.3% on Friday, with Japan's Nikkei down 1.8% and South Korea's Kospi tumbling more than 5% after briefly topping 8,000.
U.S. Treasury yields drove the selloff higher as oil-fueled inflation fears and weak debt auctions pushed the 2-year yield to 4.065%, the 10-year to 4.528% and the 30-year to 5.067%.
Japan's losses deepened after April wholesale inflation accelerated to 4.9%—the fastest in three years—reinforcing expectations that the Bank of Japan will keep raising rates.
Brent crude rose 5.7% this week to $107 a barrel as Strait of Hormuz disruptions persisted, helping lift the dollar 1.3% for the week and pushing markets to price a 45% chance of a Fed hike this year.
Trump's Beijing visit offered only a brief respite from Iran-war anxiety, leaving investors focused on fragile energy supplies, sticky inflation and the risk of further pressure on global stocks.

Why did Wall Street hit record highs while Asian markets plunged on the exact same global inflation fears?

Will central bank rate hikes cool inflation or just trigger a recession without solving the underlying energy crisis?

As the Middle East crisis deepens, is the global economy headed for its largest energy shock in modern times?