Japanese and Australian shares forfeited early gains as investors remain captive to volatility in oil prices and persistent concerns over the health of the global banking sector.

Japan’s Nikkei was down 0.3 per cent within the first 15 minutes of trade, having been up by as much as 0.5 per cent at the open. The benchmark’s 5.4 per cent slump on Tuesday was its biggest since June 2013 and was led by heavy declines in financial stocks.

Curtailing gains for equities this morning was a renewed surge in the yen, which strengthened 0.2 per cent to Y114.92 per dollar. Japanese government 10-year bonds remain in negative territory, having crossed below zero yesterday for the first time ever.

Australia’s S&P/ASX 200 also turned sharply, now down 1.3 per cent after being up as much as 0.4 per cent at the open.

Wall Street struggled last night, with the major benchmarks closing 0.1 per cent lower, and the Nasdaq Composite off 0.4 per cent.

Oil markets were volatile overnight as the International Energy Agency said global oil production fell in January by less than some had expected. Brent crude, the international benchmark slumping 7.8 per cent and West Texas Intermediate, the US marker, down 5.9 per cent. WTI rebounded in Asia today, up 1.7 per cent.

A few more Asian markets return from Lunar new year holidays, namely Singapore and Malaysia. China, Hong Kong and Korea are still off. As such, the economic calendar still remains light:

  • 09.00: Philippines December imports and exports
  • 10.00: Japan January Tokyo office vacancies

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