Asia-Pacific markets opened higher Wednesday, with Japan's Nikkei 225 gaining 1.4% and the broader Topix up 0.6%. South Korea's benchmark Kospi as well as the small-cap Kosdaq added over 1%. Australia's benchmark S&P/ASX 200 was marginally higher. Indonesia's rupiah breached 18,000 per US dollar for the first time in nearly two months on Tuesday, as Asian currencies stayed under pressure from rising global bond yields and US-Iran tensions.
The rupiah hit its lowest level since August 4 at 18,010 per dollar and stayed near the closely watched 18,000 level through the session.
US stocks ended the session slightly lower on Tuesday, as government bond yields continued their ascent ahead of inflation and labor market data, while investors assessed comments from Federal Reserve officials for the path of interest rates. Longer-dated US Treasury yields rose, with the 30-year bond hitting 5.6206%, its highest since June 2002. The yield on the benchmark 10-year Treasury bond climbed to 5.293% - its highest level since June 2007.
The 30-year fixed rate mortgage hit 7.58% on Tuesday, the highest level since November, 2023. Borrowing costs for consumers are set to rise as the Federal Reserve is projecting to raise overnight interest rates to 4.1% by the end of the year, up from its current range of 3.75% to 4%. Expectations for a rate hike of at least 25 basis points from the Fed at its October meeting declined to 51.5%, according to CME FedWatch, in the wake of US Federal Reserve Bank of New York President John Williams's remarks. Williams said the US central bank has time to weigh the data before deciding when to hike interest rates again.
Crude oil prices fell as concerns over supply disruptions eased on news of a recovery in Saudi Arabia's crude exports from its Red Sea ports following an attack on a key pipeline earlier this month. Uncertainty over the reopening of the Strait of Hormuz continued amid the ongoing US-Iran war. Brent crude futures, the international benchmark, fell 2.6% to close at $102.59 a barrel on Tuesday, while U.S. West Texas Intermediate futures fell by around 3.5% to $89.38.
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