TOKYO: Asian stocks fell to a two-month low on Wednesday as nervous markets recoiled on worries about an earlier U.S. interest rate hike, while such a prospect helped send the dollar to a 12-year high against the euro.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.3 percent after touching its lowest since January. Australian and South Korean shares each lost 0.5 percent and Malaysian and Indonesian stocks also declined.
Riskier assets both in the United States and elsewhere have come under pressure after Friday’s robust U.S. employment data increased expectations that the Federal Reserve could raise rates as soon as June -a prospect that appeared relatively more remote a few weeks prior.
The possibility of higher U.S. yields siphoning away funds from riskier assets gave the S&P 500, at a record high two weeks ago, its worst decline in two months overnight and emerging market stocks declined to their lowest since early January.
