Asian Stocks See Worst Week Since December Before Yellen Speech

  • Traders pricing in imminent U.S. rate rise by Fed officials
  • China’s Li Keqiang to reveal economic targets this weekend

Odds of Fed Rate Hike at 90%

Asian stocks fell as investors shunned risk before U.S. central-bank chair Janet Yellen is expected to provide hints about the possibility of a interest rate increase this month.

The MSCI AC Asia Pacific Index declined 0.7 percent as of 4:35 p.m. in Hong Kong, set for its worst week in two months. Japan’s Topix index fell, paring a three-day gain. South Korea’s Kospi index underperformed in Asia as tourism stocks led by Hotel Shilla Co. plunged after a report said China will curb tourism to the nation.

“The focus for the day ahead would likely be on Federal Reserve Chair Yellen’s speech in Chicago before next week’s jobs data release for guidance on the Fed’s path,” Jingyi Pan, market strategist at IG Asia Pte Ltd. wrote in an e mail.

The S&P 500 Index posted its worst day in a month yesterday as investors withdrew from a rally that has pushed U.S. equities to new highs. Yellen is scheduled to speak on the economic outlook in Chicago Friday after deputy Stanley Fischer speaks in New York.

Traders are betting on a 90 percent chance the Federal Reserve will raise rates this month, versus 40 percent at the end of last week, after several central-bank officials signaled their willingness to increase borrowing costs, with Fed Governor Lael Brainard being the latest.

China government’s top advisory body, the Chinese People’s Political Consultative Conference opens in Beijing, and will run alongside the meeting of the nation’s legislature, the National People’s Congress, which commences Sunday with Premier Li Keqiang delivering proposed key economic targets for the year. A report from Malaysia later today showed January exports improved.

SUMMARY

  • Japan’s Topix -0.4%, Nikkei -0.5%
    • Toyota -0.2%, Mitsubishi UFJ -0.6%, Komatsu -1.5%
  • Hang Seng Index -0.7%, HSCEI -1%, Shanghai Composite -0.4%
    • AIA -0.6%, Tencent +0.4%
  • Australia’s S&P/ASX 200 -0.8%
    • Materials gauge -2.1%; Rio Tinto -4.1%, BHP Billiton -1.4%
  • South Korea’s Kospi -1.1%
  • Singapore’s Straits Times Index -0.7%, Jakarta Stock Exchange Composite Index -0.2%, Malaysia’s KLCI Index -0.3%, Philippines Stock Exchange PSEi Index +0.2%, Thailand’s SET Index -0.1%
  • S&P BSE Sensex Index -0.2%

— With assistance by Livia Yap

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