Asian stock markets, including Japan’s, showed mixed dynamics on Friday after oil prices rose and amid multi-year highs in US and Japanese government bond yields. The Tokyo index gained 1.2%, while Hong Kong lost nearly 2%. Markets in Sydney and Jakarta also declined, while exchanges in Shanghai, Taipei and Seoul were closed for holidays, Asharq Al-Awsat reports.

Oil and bonds

Brent crude oil prices fell 0.7% on Friday after jumping more than 3% the previous day. Global stock markets mostly fell on Thursday: yields on 10-year US Treasury bonds reached their highest level since 2007, while 30-year yields hit their highest since 2004. The yield on Japan’s 10-year government bonds set a new 30-year high in the morning.

XTB research director Kathleen Brooks said markets lack a clear direction because of uncertainty over the bond situation and the war in the Middle East. According to her, as long as these issues remain unanswered, volatility will prevail, primarily in commodity and debt markets.

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US-China trade truce

The trade truce between the United States and China was extended by two months, until January 10. At the same time, issues concerning tariffs, agricultural purchases, rare earth metals and technology restrictions remained unresolved.

MUFG analyst Lloyd Chan noted that new geopolitical risks in the Middle East emerged against the backdrop of an already tight oil market and heightened concerns over supplies and inflation. He also stressed that trade risks in US-China relations persist. Japanese Finance Minister Satsuki Katayama said that US President Donald Trump expressed concern over the weak yen during a bilateral meeting in Washington.

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