Asian markets were rattled Thursday by hawkish comments made a day earlier in Washington by U.S. Federal Reserve Chairman Ben Bernanke and bad news out of China’s manufacturing sector.
The dollar hit a three-year high and Japanese bond yields rose to their highest level in a year as traders bought dollars following Bernanke’s comments Wednesday before the Joint Economic Committee of Congress. During the meeting, Bernanke suggested that the U.S. economic recovery was strong enough to consider a near-future reduction of the Fed’s quantitative easing policy that's been injecting $85 billion into the economy every month. Weak manufacturing data out of China also helped drag down Asian-Pacific shares.
The broad index of Asian markets outside of Japan fell as much 2.4 percent on Thursday while Japan’s Nikkei fell more than 7 percent. Other regional bourses saw similar downward pressures, including the Singapore stock exchange, which saw its worst single-day drop in a year. Hong Kong shares hit a seven week low after China’s flash HSBC Purchasing Managers' Index (PMI) for May fell to 49.6, indicating contraction.
Angelo Young is a general assignment business reporter who joined IBTimes in April 2012. Much of his career has been behind the scenes as a copy editor, assignment editor and...