Asia stocks track Wall Street rally as treasury yields retreat

Asian shares rallied on Thursday after blockbuster results from tech darling Nvidia boosted Wall Street and a retreat in U.S. bond yields eased pressure on borrowing costs globally.

A round of soft surveys on manufacturing had also revived hopes central banks were done tightening, though that might change depending on what clues about interest rates Federal Reserve Chairman Jerome Powell gives at an annual central bank summit in Jackson Hole, Wyoming, on Friday.

“Equities rallied and bond yields retreated as flash PMI data for August signalled weaker economic activity in the U.S., euro area and UK, fuelling market expectations that central banks may not have to raise rates again,” said analysts at ANZ in a note.

“This week’s Jackson Hole Symposium remains firmly in focus for markets … We expect (Powell) will err on the side of caution with respect to inflation, noting some signs of improvement but still with a long way to go.”

Investors will also be monitoring interest rate decisions and policy guidance from South Korea and Indonesia on Thursday.

Early in the Asian trading day, MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.7%, also lifted by Nvidia’s bullish outlook.

The index is however down 8.1% so far this month due to the weakness in China’s economy and yuan, as well as some gloomy factory readings from Japan, which also left sentiment fragile.

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