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Asian stocks turned lower on Tuesday while bond yields and the dollar hit multi-month highs and gold traded near record peaks as investors hunkered down ahead of the US election.
Benchmark 10-year Treasury yields rose three basis points in Asia to 4.21 per cent, extending a sharp move higher and hitting the highest level since late July, according to a Reuters report.
US and FTSE stock futures wobbled 0.2 per cent lower. European futures rose 0.1 per cent.
Investors also took some cash off the table in Japan, which has a general election coming up on Sunday with stocks, bonds and the yen all falling in tandem as polls have shown the possibility of the ruling coalition losing its majority.
Japan's Nikkei was down 1.4 per cent in afternoon trade to touch its lowest since early October, while the yen hit 151 per dollar for the first time since July and bonds tracked the selling in US Treasuries.
"It's a small capital flight out of Japan," said Naka Matsuzawa, Japan macro strategist at Nomura. More broadly, he said, markets were starting to speculate on a "red sweep", delivering Republicans the White House and Congress in November.
"It's not just Trump's policies, it's a higher probability of Trump winning meaning that the Republicans dominate," he said. "That pushes up term premiums and inflation expectations."
MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.7 per cent with benchmark indexes in Australia and South Korea losing more than 1 per cent.
China's markets were pinned well below recent highs while traders wait for more details and especially more government urgency and spending to support the ailing economy.
Hong Kong's Hang Seng was near flat, while the Shanghai Composite inched 0.2 per cent higher. Hyundai Motor India's shares fell 2 per cent in a tepid debut, with retail investors staying away.
WAITING GAME
Besides the yen, foreign exchange markets steadied after a session of selling almost everything against the dollar. The Australian and New Zealand dollars were each up about 0.5 per cent on the US dollar while the euro and sterling rose 0.1 per cent.
The move pushed sterling back over $1.30, though traders are wary as Bank of England Governor Andrew Bailey is due to speak at 1325 GMT and has recently suggested the central bank can move more aggressively to cut interest rates.
Commodities remained under pressure from expectations of lacklustre Chinese demand and disappointment over the support plans so far revealed for China's economy. Iron ore prices fell more than 1 per cent in Singapore to $100.70 a ton, though copper prices steadied.
Oil prices also steadied and Brent crude futures traded at $73.96 a barrel in Asia. China's oil-demand growth is expected to remain weak in 2025, the head of the International Energy Agency said on Monday.
A relatively bare data calendar puts extra focus on US earnings for insight into the economy and markets' mood.
General Motors, Texas Instruments, Verizon Lockheed Martin and 3M are among those reporting on Tuesday.
"It's waiting game mode until we get some more data," said ANZ strategist Jack Chambers, with US jobs data on November 1, ahead of the election on November 5 and the next Federal Reserve decision, on November 7, the major marks in the diary.