Asia Stocks Slide on Fresh Trump Jitters; Yen Rises

Equities tumbled across Asia after the S&P 500 Index fell the most since Donald Trump’s election, as stocks joined an unwinding of reflation trades amid uncertainty over prospects for the U.S. president’s policies. The yen rose as investors sought haven assets.

The MSCI Asia Pacific Index dropped the most since December, with financial and commodity shares leading the selloff. Benchmark indexes in Japan, Hong Kong and Australia fell at least 1.4 percent after the S&P 500 Index sank more than 1 percent for the first time since Oct. 11. A gauge of emerging-market stocks halted an eight-day rally. A slump in government bond yields continued and the yen strengthened for a seventh day. Gold maintained gains while base metals tumbled.

Volatility in financial markets is soaring after a period of relative calm as concern is mounting that pro-growth U.S. policies won’t sail through Congress. The Republican plan to repeal and replace Obamacare is drawing strong opposition ahead of a crucial floor vote in the House. House Republicans warned failure to pass a health-care bill on Thursday could imperil tax and spending reforms.

Equities until now have largely escaped investors’ efforts to unwind so-called Trump trades. While the dollar has been falling steadily since the beginning of the year, dropping more than 4 percent from a January peak, global stocks have been marching higher. The MSCI All Country World Index reached a record last week while the MSCI Emerging Markets Index closed Tuesday at the highest since June 2015.

Here are the main moves in markets:

Stocks

· The MSCI Asia Pacific Index dropped 1.6 percent as of 3:04 p.m. in Tokyo. Japan’s Topix lost 2.1 percent, for the biggest loss since Trump’s election. The selloff comes despite data showing Japan’s exports rose the most in two years in February.

· Australia’s S&P/ASX 200 fell 1.6 percent, also the most since November.

· The MSCI Emerging Markets Index dropped for the first time in nine days, falling 0.9 percent.

· South Korea’s Kospi lost 0.6 percent. North Korea conducted a missile test on Wednesday morning that appeared to have failed, South Korea’s defense ministry said, in what would be the latest provocation from Kim Jong Un’s regime.

· The Hang Seng Index dropped 1.4 percent, while a measure of Chinese shares traded in Hong Kong lost 2.1 percent, the most since Dec. 15 after closing at the highest in almost 17 months on Tuesday.

· Contracts on the S&P 500 fell 0.4 percent. The benchmark index tumbled 1.2 percent to the lowest since Feb. 14 on Tuesday. Banks sank 2.9 percent for the steepest slide since June 24, the day after the U.K. vote to leave the European Union. The Stoxx Europe 600 Index fell 0.5 percent.

Currencies

· The Bloomberg Dollar Spot Index climbed less than 0.1 percent, after slipping 0.3 percent on Tuesday to cap a five-day decline.

· The yen strengthened 0.2 percent to 111.56 per dollar, the highest level since Nov. 28. The Australian dollar slipped 0.4 percent.

· The British pound was little changed after jumping 1 percent Tuesday as U.K. inflation accelerated more than forecast to break through the Bank of England’s target for the first time since 2013. The euro was also flat after climbing 0.7 percent in the previous session.

Bonds

· The yield on 10-year Treasury notes declined less than one basis point to 2.42 percent, after sliding four basis points in each of the past three sessions.

· Australian 10-year yields dropped five basis points to 2.76 percent. New Zealand equivalent rates retreated two basis points to 3.20 percent.

Commodities

· West Texas Intermediate oil fell 0.4 percent to $48.05, dropping for a third day as U.S. crude supplies are forecast to climb.

· Copper lost 0.6 percent following a 1.8 percent drop in the previous session amid signs supplies are returning. Disruptions caused the metal to surge last month to the highest level since 2015. Nickel fell 1.7 percent. Iron ore futures tumbled more than 4 percent, adding to Tuesday’s steeper decline to approach a bear market.

· Gold was steady at $1,245.35 an ounce, after five days of gains.

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