Asian stocks showed mixed movement on Tuesday August 11, with US equity-index futures also edging lower overall.
The Kospi fell 1.09% in intraday trading, while Hang Seng futures rose 0.55%. Japan’s stock market remained closed for Mountain Day, a national holiday observed on the second Monday of August.
Brent crude neared $87.70 a barrel after gaining about 10% over the previous four sessions, a rise that pushed the benchmark 10-year Treasury yield up six basis points to 4.71% in the previous session.
Both Brent Crude and West Texas Intermediate (WTI) , with WTI holding on to the $82 a barrel level this morning.
Cash trading in Treasuries was suspended during Asian hours on Tuesday because of the Japanese holiday.
The Japanese yen stayed in focus after it weakened 1% on Monday, wiping out roughly half its recent intervention-led rally. The move kept traders on alert for further official support, though the currency steadied slightly to trade at about 159.17 per dollar in early Tuesday trading.
The offshore yuan held largely steady at 6.7456 per dollar.
Asian bank stocks, meanwhile, staged one of their strongest rallies in decades, as investors moved away from the volatile AI trade in search of safer bets, favouring lenders for their attractive dividends, steady earnings and strong exposure to local economies.
The defensive shift also offered protection against sticky inflation and ongoing geopolitical uncertainty, while allowing investors to sidestep an increasingly crowded AI trade.
The MSCI Asia Pacific Financials Index climbed 8.6% in July, recording its best-ever monthly outperformance against the technology gauge, and its best monthly outperformance against the broader regional index since October 1998, when Japan launched a massive bank rescue package following the Asian financial crisis.
Hong Kong’s financial stocks posted their strongest month in almost four years, while Japanese banks doubled the gains of the benchmark Topix this year. The rally mirrored a similar trend in the US, where the S&P 500’s financial sub-gauge repeatedly hit record highs through the year.
Japan emerged as the standout market, with the Topix bank sub-gauge surging over 40% this year, more than double the benchmark’s 20% gain.
Robust loan demand, corporate governance reforms and a favourable interest-rate environment boosted investor confidence in Japanese banks, while a weak yen fuelled expectations that the central bank would turn more hawkish to support the currency.
Indian lenders also drew growing optimism, as investors bet that stronger loan growth would lift fee income.