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© Reuters. A woman shows an e-board indicating the stock price while she poses in front of him after the New Year's opening ceremony at the Tokyo Stock Exchange (TSE), organized to wish the success of the Japanese Stock Exchange to Tokyo.
By Hideyuki Sano
TOKYO (Reuters) – Asian stocks were down on Thursday as the Hong Kong market retreated for the second time in a row after a day of massive street protests as oil prices dipped to their lows levels for the past five months due to higher inventories and dark prospects.
The hopes that the US and China reach an agreement on the sidelines of the Group of 20 summit held in Osaka on June 28-29 have faded, undermining confidence and falling yields bondholders.
"There is not even a plan for bilateral ministerial meetings before the G20 summit – you can not expect a major deal," said Hirokazu Kabeya, chief strategist at Daiwa Securities.
The largest MSCI index of Asia Pacific shares out of Japan fell 1%, while that of Hong Kong fell 1.5% after falling 1.7% from Wednesday.
The pressure to sell in Hong Kong came after a mass protest against legislation allowing extradition of citizens in China triggers a mass protest and arouses some of the worst unrest since the handover of the Great Britain to the Chinese authority in 1997.
Japan lost 0.8%, while US equity futures lost 0.3% in Asia, following slight losses the previous day at the time of the 0.20% loss.
Oil hit the lowest levels in five months, under pressure from another unexpected rise in US crude oil inventories, as well as weaker demand prospects sparked by prospects for a protracted trade war between China and the United States.
Futures were barely up to $ 60.06 early in the session, after falling 3.7% on Wednesday to $ 59.97 a barrel, the lowest closing of the international benchmark since January 28th.
The futures price of West Texas Intermediate crude oil is $ 51.12 per barrel, compared to $ 50.72 per barrel at the close of the day before, the lowest since January 14.
"It's a little mysterious that oil prices are so low when world stock prices remain relatively strong, but one thing is certain: The drop in oil prices will help curb inflation and increase oil prices. expectations of rate reduction, "said Daiwa's Kabeya.
Government data showed Wednesday that US consumer prices had barely risen in May, with core annual inflation slowing to 2.0% from a peak of 2.4% last July, raising expectations. rising rate of the Federal Reserve in the coming months.
Investors will look at what Fed policymakers will say after its next policy meeting on June 18 and 19, with a 25 basis point reduction in federal fund futures for the subsequent policy review of the 30 -July 31.
The yield on 10-year US Treasuries dropped to 2.103%, or close to 2.053% Friday, its lowest level since September 2017.
Bond yields fell in Asia. Japanese long-term government bond yields reached their lowest level since August 2016, with a 20-year yield down 2.5 basis points to 0.220%.
In Australia, which has long been known for its high-yielding currency, yields have fallen to record levels, with the three-year yield now falling below 1%.
In the foreign exchange market, the yen was appreciated 0.25% to 108.25 USD, the risk climate deteriorating, while the Australian dollar lost 0.2% to 0.6913 $.
The euro has not changed much, to $ 1.12929, after being hit Wednesday after US President Donald Trump has considered punishing the Russian pipeline project Nord Stream 2 and warned Germany not to depend from Russia for its energy.
The pound sterling is set back after British lawmakers defeated an attempt by the Labor opposition party to try to block a Brexit without agreement by taking control of the government's parliamentary program.
The pound reported $ 1.2688, not far from this week's low of $ 1.2653.
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