FX168 Financial News (Asia Pacific) reports that on Wednesday (November 14), Asian stocks fell, with a significant rise in US bond yields causing investor unease ahead of key inflation data that may impact the pace of Federal Reserve policy easing.

The nikkei/yen in japan and the Kospi index in south korea fell by 1.8% and 2.2%, respectively, while the Australian stock market benchmark dropped 1% due to commodity stocks dragging it down. #Decision Analysis#

US s&p 500 index futures pointed to a further decline of 0.2% after dropping 0.3% overnight. The pan-European Stoxx 50 futures fell by 0.3%.

The US bond market reopened after the Veterans Day holiday, with short-term Treasury yields surging to their highest level since the end of July on Tuesday, driving the dollar against the yen to a three-month high.

The two-year US Treasury yield jumped to 4.367% on Tuesday, the highest since July 31, and remained at 4.351% on Wednesday. The 10-year yield hovered around 4.43%, near the four-month high of 4.479% reached after Trump's significant victory last week.

“The 10-year US yield has significant technical resistance at 4.48%-4.50%,” said IG analyst Tony Sycamore. “If tonight's inflation data exceeds expectations, breaking this level could drive yields toward 4.75%, while the stock market might find it hard to ignore this trend.”

Since last week when Donald Trump was re-elected as president of the usa, bond yields have surged as the market anticipates lower taxes and higher tariffs will increase government borrowing and widen the fiscal deficit. Analysts believe that Trump’s proposed policies will further exacerbate inflation, which could hinder the Federal Reserve's path to further rate cuts. These expectations had previously pushed the us stock market to historic highs, but with the surge in bond yields, the overnight stock market rally stalled.

“This is still part of the 'Trump trade', focused on higher deficit spending,” said Kyle Rodda, senior market analyst at Capital.com. “However, as proven in other market rallies, a tug-of-war between stocks and bonds will ultimately emerge, as higher risk-free yields suppress valuations.”

Bitcoin is currently trading around $0.088 million, taking a breather after climbing close to its historical high of $90,000 on the previous trading day, as the market bets on Trump's promise to make the USA the "global cryptocurrency capital," bringing about a more relaxed regulatory environment.

In the foreign exchange market, the dollar index, which measures the dollar against the yen, euro, and four other major currencies, stands at 106.03, close to the May 1 high of 106.17 set on Tuesday.

The dollar against the yen rose to 154.94 on Wednesday, the first time since July 30, approaching the 155 level that many market participants believe could trigger verbal intervention from Japanese authorities.

Last week, Atsushi Mimura, the currency chief of the Japanese Ministry of Finance, stated that if the market experiences excessive volatility, officials are "prepared to take appropriate action when necessary."

Shoki Omori, chief strategist at Mizuho Securities Japan, said that technically, if the dollar/yen breaks through 155, "there is no significant resistance between 155 and 158, so it could rise quickly and test 158, where the Japanese Ministry of Finance intervened in May."

According to CME's FedWatch tool, traders currently assess a 62% probability that the Federal Reserve will cut interest rates by 25 basis points at its policy meeting on December 18, down from 77% a week ago. If the U.S. Consumer Price Index (CPI) released on that day exceeds expectations, this probability could further decline. Economists predict that the core CPI will rise by 0.3% month-on-month.

The euro is trading at $1.0615, having fallen to a one-year low of $1.0595 overnight. Trump once stated that the EU would "pay a huge price" if it did not sufficiently purchase American products, and Europe is also believed to be affected by Trump's tariffs.

"Given the current downward momentum, the expected significant divergence in policy between the Federal Reserve and the European Central Bank, and the impending tariff risks, currently betting on a decline in the dollar requires a certain level of courage," said Chris Weston, research director at Pepperstone.

Three-month copper on the London Metal Exchange fell 0.1% to $9,130 per ton, having dropped to $9,107 on Tuesday, the lowest level since September 11.

Brent crude oil futures rose 0.3% to $72.07, while US crude oil futures increased 0.2% to $68.27, remaining close to the lows set on Tuesday, the lowest since October 30.

Under pressure from a stronger usd, gold prices attempted to stabilize after falling to a two-month low of $2,589.59 on the last trading day, rising 0.3% to around $2,605 on Wednesday.