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Government bonds rallied and stocks across Asia sold off as positive sentiment surrounding this week’s US jobs report faded and investors weighed the minutes from the Federal Reserve‘s most recent meeting where it broached starting the process of reducing its $4.5tn balance sheet.

Minutes from the US central bank’s March meeting, with investors homing in on discussion about how and when the Fed might begin winding back its bond and mortgage-backed security holdings.

Yields, which move opposite to price, on benchmark US 10-year Treasuries were down 0.2 basis points at 2.3336 per cent in Asia today, and fell 2.5bps on Wednesday in the wake of the minutes.

US stocks initially received a boost following a robust report on the labour market, which spurred hopes for closely-watched non-farm payrolls data due on Friday. However, this did not last and the S&P 500 closed 0.3 per cent lower.

In Asia, Japan’s Topix was down 1 per cent while Australia’s S&P/ASX 200 shed 0.5 per cent, with the heavyweight financial sectors weighing heavily upon both benchmarks.

Hong Kong’s Hang Seng was down 0.3 per cent, while China’s Shanghai Composite eased 0.1 per cent from yesterday’s four-month high.

Copyright The Financial Times Limited 2017. All rights reserved.
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