Asian stocks fell to a 11-month low on Wednesday after another piece of resilient U.S. economic data sent Treasury yields to fresh highs, while a sharp rise in the yen had traders speculating that Japanese authorities stepped into the market.
The yen breached the 150-per-dollar level before suddenly shooting to 147.3. There was no confirmation from Tokyo, where Japan's top currency diplomat made no direct comment on the move. The dollar/yen pair last stood at 149.11.
MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) fell 0.4% to its lowest since November, with Australian shares (.AXJO) also hitting an 11-month trough and South Korea's Kospi (.KS11) back from a break with a 1.8% fall.
Japan's Nikkei (.N225) dropped 1.7% to a four-month low.
Overnight, U.S. job openings unexpectedly rose, increasing by the largest amount in more than two years. Ten-year Treasury yields rose almost a dozen basis points to a 16-year high of 4.81% and the S&P 500 (.SPX) fell 1.4%.
"The jump in job openings suggests the U.S. labour market is easing less rapidly than implied by recent data releases, vindicating the Fed's recent message that rates will remain higher for longer," said NAB FX strategist Rodrigo Catril.
Ten-year Treasury yields were steady in early trade on Wednesday and are up some 70 basis points since the start of September, in a move that has confounded market expectations for a peak in yields and in the U.S. dollar.
The dollar marched to a 10-month top on the euro at $1.0448 overnight and a seven-month peak on sterling at $1.20535. The New Zealand dollar slid 0.7% overnight and was last at $0.5912 ahead of a central bank meeting.
Most of the focus, however, was on the dollar/yen pair, which has been under pressure from the growing gap between rising U.S. yields and anchored Japanese rates. It recoiled almost instantly after spiking to 150.165.
The sharpness of the move suggested a rate check or even outright buying from Japanese authorities, who have been warning they could intervene.
"Market participants will closely watch what Japanese authorities have to say about the rapid and sharp yen gains overnight," said CBA strategist Carol Kong.
"The overnight moves suggest 150 can prove a strong resistance ... that said, dollar/yen will remain at the mercy of U.S. yields in our view."
The yield spike also cruelled the gold price , which fell to a seven-month low of $1,814 overnight and had investors turning wary of taking risks on stocks and other growth assets.
"With the risk-free rate so high, it's not really compelling for people to allocate away from short-term cash-like investments," said Mel Siew, a portfolio manager at Muzinich & Co in Singapore.
