Asian shares stumble as U.S. yields, dollar hold firm

Asian shares stumble as U.S. yields, dollar hold firm

HONG KONG: Asian shares lost ground on Wednesday, tracking declines on Wall Street as investors fretted over economic uncertainties that caused a spike in U.S. benchmark bond yields and pushed the dollar to a more than 10-month high. Doubts are re-emerging over the global recovery at a time when the U.S. Federal Reserve is set to taper stimulus and the Biden Administration is stuck in contentious debt ceiling negotiations that could lead to a government shutdown. Benchmark 10-year rates have gained 25 basis points in five sessions and were last at 1.5513%, having hit their highest since mid-June the day before, while the dollar index was at 93.752. "We think (10-year treasury yields) are likely to around 1.5% to 1.75%, so they obviously still have room to go," said Daniel Lam, senior cross-asset strategist at . Lam said the rise in yields was driven by the fact that the United States was almost definitely going to start tapering its massive asset purchases by the end of this year, and that this would drive a shift from growth stocks into value names. He said this change would be unlikely to significantly reverse recent flows from Asian to U.S. equities as policy