Asian stocks fall as oil stokes inflation fears
The MSCI Asia Pacific Index slips 0.4% as benchmark gauges in Japan, South Korea and Australia drop
Published Thu, Sep 10, 2026 · 10:03 AM
ASIAN stocks fell, tracking losses on Wall Street, as surging oil prices stoked inflation concerns and Treasury yields rose. Oil held above US$101 a barrel.
The MSCI Asia Pacific Index slipped 0.4 per cent, with benchmark gauges in Japan, South Korea and Australia all declining.
Among the main moves across markets, the S&P 500 futures were little changed as at 10 am Tokyo time. The Hang Seng futures fell 0.9 per cent, Nikkei 225 futures (OSE) dropped 1.3 per cent, Japan’s Topix retreated 0.4 per cent and Australia’s S&P/ASX 200 declined 1.7 per cent.
The S&P 500 Index fell 0.5 per cent in the US session, led by industrial and consumer discretionary shares. The Nasdaq 100 Index dropped 0.3 per cent, weighed down by losses in Nvidia, Amazon and Alphabet.
Brent crude climbed as high as US$101.94 on Thursday (Sep 10), before paring gains, as escalating Middle East tensions raised concerns about energy supplies.
The Treasury 10-year yield climbed to 4.85 per cent in the US session, a level last seen in late 2023, after the US government’s plan to buy up to US$6 billion of longer-maturity debt disappointed some investors who had expected a larger increase.
The combination of higher oil prices and rising bond yields leaves markets particularly sensitive to Friday’s US inflation report, which may determine whether the US Federal Reserve raises interest rates when it meets next week.
A stronger-than-expected reading may reinforce bets on further tightening and put additional pressure on stocks and bonds, while softer data could damp those expectations.
“The longer elevated prices persist, the harder it becomes for markets to shrug off the inflation impulse,” said Evelyne Gomez-Liechti, a multi-asset strategist at Mizuho International.
Oil prices were underpinned after Iran vowed it was prepared for a more intense war after hostilities flared across the Middle East.
US President Donald Trump said the war would only end after the November midterm elections and that significant petrol price relief would not come before then, signalling little prospect of a near-term de-escalation in the conflict, now in its seventh month.
“The temperature just got turned up again,” said Kenny Polcari at SlateStone Wealth. “The risk premium is alive and well, and the risk to energy supplies coming out of the Gulf is real.”
The yen halted a three day gain, slipping 0.1 per cent to 153.65 per US dollar. The currency climbed on Wednesday following US Treasury Secretary Scott Bessent’s jawboning, with traders also awaiting a speech by Bank of Japan board member Kazuyuki Masu later on Thursday.
Bloomberg’s gauge of the US dollar was little changed.
The US Bureau of Labor Statistics will release August producer price data on Thursday, followed by the consumer price index numbers on Friday.
Swaps imply about a 62 per cent chance the Fed will raise rates by a quarter point on Sep 16, up from 60 per cent on Tuesday. At least two hikes by the middle of 2027 are fully priced in.
“A hot CPI print would all but seal a September hike and underpin a firmer US dollar,” said Elias Haddad at Brown Brothers Harriman & Co.
“A cooler reading would strengthen the case for a hold and leave the US dollar vulnerable to a dovish Fed repricing.” BLOOMBERG
