As interest rates go up, Asian markets fall.

 Sterling and the euro both hit new lows in the early hours of Asia

SYDNEY, Sept 26 Monday was the first day of the last week of the quarter. Asian stocks went down, while the dollar went up, as the idea of high interest rates and slow growth shook the markets.

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S&P 500 futures fell 0.2%. MSCI's broadest index of Asia-Pacific shares outside of Japan was down 0.5% and at a two-year low before Hong Kong opened. It's going to lose 10% this month, which would be the most since March 2020.

Japan's Nikkei fell 2%, South Korea's Kospi hit a low not seen in two years, and Australia's ASX 200 fell 1.4% to a low not seen in three months. Worries about global demand weighed heavily on mining stocks, which fell the most.

Dollar reaches a new peak

During slow morning trading, the dollar reached new highs against the pound, the euro, and the Australian dollar.

Last week, stocks and bonds fell after the US and about six other countries raised interest rates and said bad things were coming. Japan stepped into the currency market to help the yen. Investors lost faith in the way Britain ran its economy.

For the second week in a row, the Nasdaq lost more than 5%. The S&P 500 dropped by 4.8%.

"No one has changed their mind after a weekend to think about it," said Ray Attrill, head of currency strategy at the National Australia Bank in Sydney. "When it comes to UK assets, it's a case of shoot first and ask questions later."

On Friday, the most Gilts were sold in 30 years, and on Monday, the pound hit a 37-year low of $1.0765. This is because investors think that planned tax cuts will put too much pressure on government finances.

This quarter, sterling is down 11%.

Last week, the yield on a five-year gilt rose by 94 basis points, which is by far the biggest weekly jump that Refinitiv has seen since the middle of the 1980s. Last week, two-year yields went up 35 basis points to 4.214%, and benchmark 10-year yields went up 25 basis points to 3.6970%.

The euro shook to a level not seen in 20 years, $0.9660, as the risk of war in Ukraine grew. It then settled at $0.9686.

The value of other currencies went down. The Aussie hit $0.6510, which was the lowest it had been since mid-2020. The yen stayed around 143.47 because people were worried that the government might step in again.

Japan bought yen on the foreign exchange market on Thursday. This was the first time since 1998 that Japan had bought yen.

When the dollar went up last week, oil and gold prices went down. Gold hit its lowest price in more than two years on Friday, and an ounce of gold cost $1,643 on Monday. Brent crude futures rose 71 cents to $86.86 a barrel.

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Content source: https://www.thehindubusinessline.com/markets/stock-markets/asian-markets-fall-as-rate-hikes-rattle-stocks/article65936739.ece