Asian shares ease on investors’ Fed-driven caution

Asian share markets declined from high grounds on Wednesday. This came after Wall Street saw a subdued overnight session on investors’ anticipation that the U.S. Federal Reserve will signal faster-than-expected policy normalization.

MSCI’s broadest index of Asia-Pacific shares outside Japan recorded a 0.3% decline, with South Korea’s Kospi and Australia’s S&P/ASX 200 performing the weakest. The Shanghai Composite index dropped 0.4%, while Hong Kong’s Hang Seng traded 0.2% lower.

Financial markets across the globe were previously swayed by a rout in Treasuries, with the benchmark yield reaching historic peaks. While bond investors’ sentiment was greatly fueled by coronavirus vaccinations and U.S. fiscal stimulus, this might lead to volatility that would prompt the Fed to adjust its policy rates.