TOKYO (Reuters) – Asian stock markets held firm and bond yields rose on Wednesday as hopes of diminishing U.S.-China tensions and reduced risk of no-deal Brexit prompted investors to take profit in risk-off trade ahead of key central bank policy meetings.
FILE PHOTO: Passersby are reflected on an electronic board showing the exchange rates between the Japanese yen and the U.S. dollar, the yen against the euro, the yen against the Australian dollar, Dow Jones Industrial Average and other market indices outside a brokerage in Tokyo, Japan, August 6, 2019. REUTERS/Issei Kato
In early trade, MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.10% while Japan’s Nikkei .N225 rose 0.32%.
On Wall Street, the S&P 500 ended little changed as a rally in energy and industrial shares countered a drop in the technology and real-estate sectors with investors favouring value over growth.
That represented a major reversal after many months of outperformance by growth shares such as tech shares.
“The sudden jump in value-oriented shares in the U.S. and elsewhere has all the hallmarks of position unwinding by major hedge funds,” said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
“Such unwinding could continue for a few days but will likely end by the Fed’s policy meeting.”
Such reversals began last week after the announcement of U.S.-China trade talks in October and as the British parliament moved to prevent Prime Minister Boris Johnson from crashing the UK out of the European Union without a deal.
Position unwinding was also apparent in bond markets ahead of