Asian shares rose Thursday, following gains on Wall Street, while South Korea’s benchmark Kospi jumped more than 6% after the US Treasury announced plans to significantly increase its purchases of longer-term government debt.
US stock futures also edged higher after the Treasury said it would at least double the size of its planned buybacks of longer-term government bonds.
The move could reduce pressure on stock markets from rising bond yields. Increased government bond purchases can push bond prices higher and, in turn, lower yields.
South Korea’s Kospi surged 6.1% to 6,858.91 after falling 5.8% on Wednesday as investors sold shares linked to artificial intelligence.
Samsung Electronics rose 9.7%, while SK Hynix, a major memory chipmaker, gained 14.1% after announcing a large share buyback programme.
Japan’s Nikkei 225 climbed 1.3% to 66,178.26, recovering from losses earlier in the week. Japan reported a trade deficit for the third consecutive month in July, with both imports and exports reaching record levels.
SoftBank Group, which has invested in OpenAI, gained 3.8%.
Hong Kong’s Hang Seng Index rose 1.1% to 25,786.32, while the Shanghai Composite gained 0.3% to 3,905.23.
Australia’s S&P/ASX 200 increased 0.3% to 9,066.40. Taiwan’s Taiex was little changed, while India’s Sensex gained 0.7%.
US government bond yields fell after the Treasury announced its expanded buyback plans. Bond prices and yields generally move in opposite directions.
The announcement appeared to ease investor concerns about rising borrowing costs. On Wednesday, the S&P 500 rose 0.2%, ending a three-day losing streak. The Dow Jones Industrial Average and Nasdaq composite each also gained 0.2%.
US bond yields have climbed in recent months amid concerns about inflation linked to the prolonged war in Iran, rising government debt and other economic pressures.
The yield on the 10-year US Treasury note fell to about 4.64%, down from 4.71% on Tuesday. However, it remains significantly higher than before the war in Iran began. The 30-year Treasury yield also declined to 5.18% from 5.28%.
Bond yields in Asia also eased following the US Treasury announcement. Japan’s 10-year government bond yield dropped to about 2.83% from above 2.89% on Wednesday. It had recently reached its highest level in about 30 years.
Oil prices edged higher Thursday as negotiations between the US and Iran showed little progress.
Brent crude, the international benchmark, rose 0.3% to $91.90 a barrel. It was trading at around $72 before the war began.
US benchmark crude gained 0.2% to $84.57 a barrel.
The US dollar rose to 158.60 Japanese yen from 158.16 yen. The euro was trading at $1.1676, slightly.