Asian Stocks Rise, Japan Auction Gets Solid Demand: Markets Wrap

(Bloomberg) — Asian stocks rebounded following Monday’s selloff that saw cryptocurrencies lead declines in global risk assets. Japanese government bonds edged higher after a keenly watched auction of 10-year debt drew firm demand.

MSCI Inc.’s gauge of regional equities climbed as much as 0.5% before paring some gains. Tech-heavy markets of South Korea and Taiwan outperformed. US stock futures were steady after the S&P 500 fell 0.5% and the Nasdaq 100 dropped 0.4% on Monday. Bitcoin advanced after fluctuating early in the session. It slumped more than 5% on Monday.

Demand at this year’s final auction of 10-year Japanese bonds was stronger than the 12-month average. The sale had assumed greater importance for traders after increased speculation over an interest-rate hike sparked a yield surge. The yen weakened slightly 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.

Japanese government bonds should be watched as 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 earlier. “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.”

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.

While the Fed is widely expected to cut rates, swaps now imply about an 80% probability of a BOJ hike at this month’s meeting, with the odds rising to more than 90% for the January gathering. That’s versus just 36% for December as recently as a week ago.

The bid-to-cover ratio for the 10-year sale was 3.59 compared with 2.97 at the previous sale in November, and a 12-month average of 3.20. Japan will auction 30-year bonds on Thursday.

“We are getting to levels in terms of Japanese yields where for Japanese investors it’s becoming interesting to bring money back,” Guy Stear, head of developed markets strategy at Amundi Investment Institute, said on Bloomberg Television. “So I think that this rise in yields will not continue ad-infinitum. I think we are closer to the end of the rise in Japanese yields than we are certainly to the beginning.”

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 five 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.

“There’s been some stabilization, but this still looks like a positioning-led bounce rather than a shift in broader conviction,” said Tareck Horchani, head of prime brokerage dealing at Maybank Securities in Singapore. “Monday’s move flushed out some weak hands, but the market remains cautious.”

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.

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.

“With the Fed set to carry out another possible rate cut and key governments adopting fiscal stances that are more growth supportive than expected, we think the global macroeconomic environment will remain favorable to investors’ risk-taking,” said Homin Lee, a senior macro strategist at Lombard Odier Singapore.

Corporate News

Fanuc Corp.’s shares climbed 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. 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. Some of the main moves in markets:

Stocks

S&P 500 futures were little changed as of 2:02 p.m. Tokyo time Japan’s Topix was little changed Australia’s S&P/ASX 200 rose 0.1% Hong Kong’s Hang Seng rose 0.1% The Shanghai Composite fell 0.6% 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 155.64 per dollar The offshore yuan was little changed at 7.0713 per dollar Cryptocurrencies

Bitcoin rose 0.7% to $87,028.01 Ether rose 0.5% to $2,806.41 Bonds

The yield on 10-year Treasuries was little changed at 4.09% Australia’s 10-year yield advanced five basis points to 4.60% Commodities

West Texas Intermediate crude rose 0.1% to $59.40 a barrel Spot gold fell 0.3% to $4,218.70 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from Richard Henderson, Abhishek Vishnoi, Ruth Carson, Masaki Kondo and Haslinda Amin.

©2025 Bloomberg L.P.