On Friday, Asian stock markets declined as increasing anxieties about the conditions of European banks further threatened a global economic outlook already pressured due to depressing crude prices and cooling in China. The prices of the yen, gold and liquid government bonds of favored countries shot up as investors jumped to traditional safe-haven assets. Japan’s Nikkei .N225 cut 3.3 percent to a record 15-month low as the yen climbed to a 15-month high. On Thursday, the firming yen moved to 110.985 to the dollar JPY, hiking almost 10 percent from its six-week low level on Jan 29, when the Bank of Japan proposed negative interest rates. The currency last stood at 112.38 yen JPY. Japanese Finance Minister Taro Aso on Friday stated that he would take appropriate action as necessary, but the yen barely responded.
Stock markets in Australia and South Korea .KS11 dropped about 0.5 percent. MIAPJ0000PUS was retained due to the dip in the dollar. On Thursday, MIWD00000PUS was down 1.3 percent to 353.35, touching its record low level since June 2013. In all, this year it dropped 11.5 percent. It has collapsed more than 20 percent below its new high last May, affirming that global stocks are in a bear market.On Wall street, the U.S. benchmark S&P 500 .SPX declined 1.23 percent to 1,829.08, its lowest in the past almost two years and cut 10.5 percent for the year.
The FTSEurofirst 300 .FTEU3 index of top European stocks descended 3.7 percent to its lowest level in almost two years. Financial counters headed the losses globally as inacceptable earnings from Societe Generale added to the depressed mood brought on by the unfortunate consequence of Deutsche Bank. Banks in Europe closed 6.3 percent lower, while the S&P financial index declined 3 percent. Pressure in the financial sector is piling worries that funding conditions for some companies may restrained even as many of the world’s central banks jumped in funds through unusual measures.
In a distressing signal of reappearance of Europe’s debt problems, the Portuguese 10-year bond yield were up above four percent for the first time since 2014. That is an obvious departure from last year when investors, hunting for yield, were buying up debt from Portugal and other indebted countries. Oppositely, investors are now grouping to more liquid, and higher-rated bonds.The 10-year U.S. Treasuries yield fell as low as 1.530 percent, a low last seen in August 2012, which is just before the Fed started its third round of quantitative easing. It stood at 1.657 percent in early Asian trade. Federal funds rate futures almost completely priced out the possibility of a rate raise. On Thursday, gold pitched to one-year high of $1,262.90 per ounce, increasing more than four percent in its largest daily percentage growth since September 2013. It last stood at $1,238.1. U.S. crude futures hit a new 13-year low of $26.05 per barrel and they traded at $27.33 in early Asia.