Asian stocks, bonds extend US$2 trillion global selloff as oil drops

Tokyo-Japan (May 7) Asian stocks and bonds retreated, extending a global rout, as Japan returned from a three-day holiday. Oil slipped after reaching its highest this year and precious metals fell with emerging currencies. All major Asian stock gauges dropped by 12:14 p.m. in Tokyo, with Chinese shares sliding after Morgan Stanley ended its overweight call.

The Straits Times Index was down 0.72 per cent at 3,434.89 as round 11:45am. The yield on 10-year Japanese bonds jumped six basis points and the Topix index slid 0.6 per cent. Emerging currencies weakened versus the dollar as Vietnam devalued its dong for the second time this year. About US$2 trillion has been wiped from the value of global equities and bonds since the start of last week amid signs of price stabilization in Europe, speculation over U.S. interest rates and on concern China's share market is overheated. Federal Reserve chair Janet Yellen said Wednesday that she sees potential danger in the rich valuations of both debt and stocks.

Investors are waiting on U.S. employment reports Friday for clues to the strength of the world's largest economy.

Source: Bloomberg