Asian shares see mixed performance as lira supports bonds

Asian share markets recorded a mixed session as bonds advanced on Monday. This followed after the Turkish lira dropped, prompting talks that capital controls are necessary to alleviate the downswing.

The lira lagged behind the dollar, and the rout was mainly from President Tayyip Erdogan’s unexpected dismissal of Turkey’s central bank governor. In turn, analysts deemed the use of capital controls necessary should authorities opt-out from using interest rates to stabilize financial markets.

The uncertainty had spilled across Asia, with Japan’s Nikkei seeing a 1.8% decline. While there was a drop, the impact was not drastic since Chinese blue chips’ 0.8% gain boosted MSCI’s broadest index of Asia-Pacific shares outside Japan.

However, investors were still cautious about surging U.S. bond yields as equity valuations stretched wider for some sectors.