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Asia stocks fall as government bonds hit following ECB minutes

Asian equities followed Wall Street lower on Friday as the global bond rout continued.

Australia’s S&P/ASX 200 was down 1.3 per cent as the financial sector was off 1.5 per cent. Coca Cola Amatil was the worst performer on the index, falling as much as 6.5 per cent as analysts assessed the impact of Domino’s Pizza Enterprises’ decision announced yesterday to instead partner with Schweppes Australia for its drinks.

Japan’s Topix index was down 0.2 per cent as the industrials sector fell 0.1 per cent and the consumer staples segment fell 0.3 per cent.

Hong Kong’s Hang Seng shed 0.3 per cent as the information technology sector fell 0.9 per cent. Cosco Shipping Holdings jumped as much as 14.2 per cent after the company said it estimates net profit for the six months to June will rise to Rmb1.85bn ($272m), from a Rmb7.2bn loss in the same period in 2016 amid a recovery in the container shipping market. The Shanghai Composite was down 0.5 per cent while the Shenzhen Composite slipped 0.3 per cent.
The rise in sovereign debt yields hit Asia Pacific after the yield on the 10-year German bund rose to an 18-month high on Thursday as investors continue to expect the European Central Bank will withdraw monetary stimulus following the release of its June meeting minutes.

The yield on 10-year Treasury, which moves inversely to its price, rose 5 basis points to 2.373 per cent.

The yield on 10-year Japanese government bonds fell 0.3 bp to 0.085 per cent after the Bank of Japan upped purchases of 10-year Japanese government bonds. The Japanese yen weakened 0.5 per cent against the dollar to ¥113.78 after following the move.

The yield on Australian 10-year government bonds rose 6.4bp to 2.701 per cent.

The dollar index, a measure of the US currency against a basket of peers, was up 0.2 per cent at 95.955.