Stocks fall as data shakes markets, yen crushed

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People walk past a screen displaying the Hang Seng stock index outside the Hong Kong stock exchanges in Hong Kong, China July 19, 2022. REUTERS/Lam Yik/File Photo

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  • The dollar/yen exceeds 144
  • MSCI AxJ index at lowest since June 2020
  • European futures slide

HONG KONG, Sept 7 (Reuters) – Asian stocks fell to their lowest level in two years on Wednesday on disappointing Chinese trade data, while the dollar surged as U.S. data bolstered expectations of aggressive stock hikes. Federal Reserve rate.

The greenback rose above 144 Japanese yen and rose more than 1% at one point to 144.38 yen, while the Chinese yuan extended its slide, closing in on the psychologically important level of 7 to the dollar.

European futures were last down 1% and FTSE futures fell 0.8%. S&P 500 futures fell 0.2%.

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Chinese export growth slowed in August as soaring inflation weighed on foreign demand while lockdowns undermined local consumption and kept a ceiling on imports. Read more

MSCI’s broadest index of Asia-Pacific stocks outside Japan (.MIAPJ0000PUS) fell to its lowest since mid-2020 and was last down 1.5%. The Japanese Nikkei (.N225) fell 0.8%.

The dollar’s gains came as stronger-than-expected services data overnight bolstered the case for rate hikes, with markets now pricing in a 75% chance the Fed will raise rates by 75 basis points. basis this month.

“Good news for the real economy has now become bad news for the market – for both the bond market and the stock market,” said Redmond Wong, China market strategist at Saxo Capital Markets in Hong Kong.

“Investors we spoke to … have lost quite a bit of confidence.”

Wall Street indices fell on Tuesday with the Nasdaq (.IXIC) losing for a seventh straight session, its longest streak since 2016.

Fixed-income markets are also tumbling and benchmark yields on 10-year U.S. Treasuries hit 3.365% in Tokyo trading, the highest level since mid-June.

Overnight data showed the U.S. services industry rebounded in August for the second month in a row amid stronger growth in orders and jobs. Read more

CRASHED YEN

The Japanese yen has now lost more than 2.5% against the dollar in two sessions, putting some investors on alert at the prospect of official intervention to halt the slide.

Japanese officials have toughened up their verbal warnings, with the government spokesman saying Japan wants to act if the “swift and unilateral” moves seen recently continue. Read more

“One of the things we tell our clients is to hedge their yen loans now,” said Davis Hall, head of capital markets at Indosuez Wealth Management Asia.

“If they ever talk about intervention (dollar/yen), they could come back down quickly.”

The euro was a hair above a two-decade low at $0.9893 as investors await Wednesday’s European Central Bank meeting.

The pound looked fragile at $1.1479 as traders await parliamentary testimony from the Governor of the Bank of England.

Elsewhere, Australia’s S&P/ASX 200 index (.AXJO) fell 1.4% even as data on Wednesday showed Australian economic growth picked up in the second quarter, raising hopes that activity could hold up to dips. significantly higher interest rates and cost of living pressures. Read more

Hong Kong shares (.HSI) fell 1.7%, taking the index back to March levels ahead of official promises of major economic support. It was weighed down by the main technology index, which extended losses to 2.4% on new regulatory warnings.

Overnight, the U.S. Securities and Exchange Commission (SEC) warned that U.S. accounting firms risk breaking U.S. rules if they agree to conduct audits of New York-listed Chinese and Hong Kong companies seeking to avoid possible trade bans. Read more

In energy markets, crude oil prices stumbled on weaker consumption forecasts. U.S. crude fell 1.7% to $85.4 a barrel and Brent to $91.7, down 1.3% on the day.

Spot gold fell 0.5% to $1,693 an ounce.

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Reporting by Selena Li; Editing by Sam Holmes, Bradley Perrett and Ana Nicolaci da Costa

Our standards: The Thomson Reuters Trust Principles.

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