Asian shares consolidate gains, bonds fly high

Wed May 28, 2014 8:27pm EDT
 
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By Hideyuki Sano

NEW YORK (Reuters) - Asian shares consolidated their recent gains on Thursday while global bond prices surged, pushing their yields to multi-month lows, both supported by expectations of easy monetary policy.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS stood flat near one-year high hit on Wednesday, while Japan's Nikkei share average .N225 shed 0.5 percent after gains after five straight days of gains.

On Wall Street, S&P500 index .SPX snapped a four-session winning streak on Wednesday to end slightly below a record closing high hit on Tuesday, though it hit an intraday record high.

More notable moves were in U.S. and European bond markets. The 10-year Treasuries yield fell to 2.44 percent from 2.52 percent, hitting its lowest level in almost 11 months.

Prior to that, German 10-year Bund yields fell to one-year low of 1.285 percent following an unexpected increase in German unemployment and a deceleration in the euro zone money supply.

The data reinforced expectations that the European Central Bank will introduce further stimulus at next month's meeting.

On top of rising expectations of easing by the ECB, global share prices were underpinned by the view that the Fed is in no hurry to raise rates even as it is reducing its bond purchases.

"In the past, when share prices rise, bond prices fell. But that no longer applies. We are likely to see a combination of high share prices and low bond yields," said Daisuke Uno, chief strategist at Sumitomo Mitsui Banking Corp.   Continued...

 
A man is reflected on an electronic stock quotation board outside a brokerage in Tokyo May 16, 2014. REUTERS/Yuya Shino