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Asia stocks pummeled by fresh Wall Street slide, safe havens in demand

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Asian stocks tumbled on Friday after Wall Street shares suffered yet another big slide amid worries over rising bond yields, while perceived havens such as the yen and Swiss franc drew demand amid the turmoil.
TOKYO (Reuters) – Asian stocks tumbled on Friday after Wall Street shares suffered yet another big slide amid worries over rising bond yields, while perceived havens such as the yen and Swiss franc drew demand amid the turmoil.
Japan’s Nikkei. N225 sagged 3 percent, en route for a weekly loss of 8.6 percent.
MSCI’s broadest index of Asia-Pacific shares outside Japan. MIAPJ0000PUS dropped 0.8 percent.
The index, which had hit a record high on Jan. 29, was on track for its sixth straight day of losses and stood to lose about 6 percent on the week. Australian shares lost 1.7 percent and South Korea’s KOSPI. KS11 fell 2.3 percent.
“The correction phase in equities could last through February and possibly into March,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.
“The rise in long-term U. S. yields will have to settle for the correction phase to end. The surge in volatility has also prompted investors to sell risk assets, in turn feeding more volatility.”
U. S. markets remained the epicenter of the global sell-off, with the Dow. DJI plunging 4.1 percent and the S&P 500. SPX sinking 3.7 percent overnight.
With Thursday’s losses, both the S&P 500 and the Dow slid into correction territory, falling more than 10 percent from Jan. 26 record highs and showing that the dust was yet to settle from the sharp slide that began a week ago. [. N]
U. S. stocks began to wobble last Friday after a healthy U. S. labor market report sparked a spike in bond yields and fears of rising inflation which could trigger more central bank rate hikes.
Higher yields are seen hurting equities as they increase borrowing costs for companies and reduce their risk appetite. They also present a fresh alternative to investors, who may choose to allocate some of their money from equities to bonds.
The benchmark 10-year Treasury note yield US10YT=RR rose as high as 2.884 percent on Thursday, just below Monday’s four-year high of 2.885 percent. It last stood at 2.8312 percent.
Treasury yields were pushed higher after the Bank of England said interest rates probably need to rise sooner, adding to expectations of reduced central bank stimulus globally. [US/]
In currencies, the dollar was down 0.15 percent at 108.590 yen JPY=, having lost 0.5 percent overnight. It was on track to lose 1.5 percent against its Japanese peer on the week.
The Swiss franc gained 0.1 percent to 0.9350 franc per dollar CHF= after advancing about 0.7 percent the previous day.
The euro added 0.1 percent to $1.2261 EUR= .
The dollar index against a basket of six major currencies stood at 90.193. DXY after touching a two-week high of 90.567 overnight.
The pound rose 0.1 percent to $1.3930 GBP=D3. It had reached $1.4067 overnight following the hawkish BoE comments.
Commodity-linked currencies sagged as crude oil prices fell to seven-week lows.
The Canadian dollar traded at C$1.2590 CAD=D4 per dollar after weakening to a six-week low of C$1.2615 the previous day. The Australian dollar fell to $0.7766 AUD=D4, its lowest since Dec. 28.
U. S. crude futures CLc1 were down 1.15 percent at $60.44 per barrel after hitting a seven-week trough of $60.27 on Thursday amid fears of rising global supplies after Iran announced plans to increase production and U. S. crude output hit record highs. [O/R]

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