Asian Stocks Rebound, Japan Bond Auction in Focus: Markets Wrap

(Bloomberg) — Asian stocks staged a rebound on Tuesday following a selloff that saw cryptocurrencies lead declines in global risk assets. Japanese government bonds were in focus ahead of an auction of 10-year debt.

A gauge of Asian equities rose 0.5%, with South Korea’s tech-heavy market outperforming. Futures contracts for US stock indexes edged higher after the S&P 500 fell 0.5% and the Nasdaq 100 dropped 0.4% on Monday. Bitcoin fluctuated early in Asia after losing more than 5% on Monday.

This year’s final auction of 10-year Japanese bonds — scheduled for later Tuesday — has assumed greater importance for traders after increased speculation over an interest-rate hike saw yields surge. The yen traded weaker against the dollar after rising the most in a week on Monday, when Bank of Japan Governor Kazuo Ueda sent the clearest hint yet that his board might raise rates soon.

“Asia is trying to stabilize after Monday’s shake-out, but it still feels more like a pause than a full-hearted risk-on,” said Charu Chanana, chief investment strategist at Saxo Markets in Singapore. “The bigger swing factor for sentiment today is Japan’s 10-year JGB auction. With markets increasingly treating a December BOJ hike as the base case, any sign of weak demand or a soft bid-to-cover will reverberate well beyond Tokyo.”

Global markets were off to a shaky start in December on Monday as the renewed selloff in cryptocurrencies and hawkish comments from BOJ’s Ueda spurred risk aversion. Focus in the coming days will remain on central bank actions as Federal Reserve policymakers meet Dec. 9-10 and the BOJ decides on rates on Dec. 19.

JGBs should be watched after yields “have been on a tear” this year on expectations of larger budget deficits and another rate hike by the BOJ, Kristina Hooper, chief market strategist at Man Group, wrote in a LinkedIn post. “This is important because rising JGB yields can help push up the yields of other longer-dated sovereign bonds, adding to borrowing costs when some governments can least afford it.”

Treasuries steadied on Tuesday after falling across the curve in the previous session, when the 10-year yield jumped seven basis points to around 4.1%. A gauge of the dollar was little changed. Australia’s 10-year yield climbed six basis points.

Elsewhere, silver retreated from a record high, with a key technical indicator showing that a six-day rally through Monday had taken the white metal into overbought territory. Gold also declined while oil edged higher.

US Economy

In the US, data Monday showed factory activity shrank in November by the most in four months as orders weakened.

Fed officials will get a dated reading on their preferred inflation gauge before next week’s rate decision. The report due Friday is expected to show that inflationary pressures are stable, but sticky. Yet the debate will likely largely center on the job market when policymakers meet for the rate decision.

Still, key data like the jobs report won’t arrive until after the December rate decision, which “drastically dilutes this week’s ability to spring any material surprises in as far as rate cut expectations are concerned,” noted Fawad Razaqzada at Forex.com.

In addition to Friday’s inflation data, other relevant economic data this week include ADP private employment figures for November and a preliminary reading of consumer confidence in December.

“We have highlighted that stocks historically performed best when the economy is not in recession and the Fed is cutting interest rates,” said Ulrike Hoffmann-Burchardi at UBS Global Wealth Management. “The latest available data suggest that the Fed is more likely to proceed with a 25-basis-point cut.”

She also noted that the current soft patch in the US economy is likely temporary, and global growth should accelerate in 2026.

Corporate News

China Vanke Co., the distressed builder that surprised markets last week when it proposed an unspecified delay in paying a local bond, has now asked holders to wait a year to be made whole, as it faces mounting liquidity pressure amid waning state support. Warner Bros. Discovery Inc. was fielding a second round of bids on Monday, including a mostly cash offer from Netflix Inc., in an auction that could wrap up in the coming days or weeks, according to people familiar with the discussions. Jane Street Group and Citadel Securities reported gains in third-quarter trading revenue, cutting further into Wall Street’s dominance of that business and leaving the two market-making firms on track for record years. After 13 years of running South Korea’s largest cryptocurrency exchange, Song Chi-hyung and Kim Hyoung-nyon have cemented their spots among the world’s wealthiest. China’s DeepSeek unveiled two new versions of an experimental artificial-intelligence model it released weeks ago, adding fresh capabilities the startup said would help with combining reasoning and executing certain actions autonomously. Chinese vaccine makers are caught in a steep downturn, as intensifying competition pushes prices lower and erodes profits, underscoring the far-reaching deflationary pressure across the world’s second-largest economy. Fanuc Corp. shares climb as much as 9.4% to the highest since July 2021 after the Japanese factory automation equipment company announced that it will collaborate with Nvidia Corp. to implement physical AI in industrial robots, in a statement Monday. Stocks

S&P 500 futures were little changed as of 10:46 a.m. Tokyo time Nikkei 225 futures (OSE) rose 0.5% Japan’s Topix rose 0.3% Australia’s S&P/ASX 200 rose 0.3% Hong Kong’s Hang Seng rose 0.7% The Shanghai Composite fell 0.4% Euro Stoxx 50 futures were little changed Currencies

The Bloomberg Dollar Spot Index was little changed The euro was unchanged at $1.1610 The Japanese yen fell 0.1% to 155.62 per dollar The offshore yuan was little changed at 7.0739 per dollar The Australian dollar was little changed at $0.6545 Cryptocurrencies

Bitcoin rose 0.1% to $86,574.29 Ether rose 0.2% to $2,798.78 Bonds

The yield on 10-year Treasuries was little changed at 4.08% Japan’s 10-year yield advanced one basis point to 1.875% Australia’s 10-year yield advanced six basis points to 4.61% Commodities

West Texas Intermediate crude rose 0.1% to $59.40 a barrel Spot gold fell 0.4% to $4,213.27 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from Richard Henderson, Abhishek Vishnoi and Ruth Carson.

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