Asian stock markets struggled to make headway on Thursday, after weak U.S. consumer data stoked recession worries and nudged investors toward safe assets such as bonds, while Japan's yen rose as markets doubted the Bank of Japan's policy commitments.
MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) fell 0.2% and benchmark 10-year U.S. Treasury yields , which fall when prices rise, hit their lowest since September at 3.326%
Oil futures fell 1.3%. European futures and FTSE futures each fell 0.5%.
Japan's Nikkei (.N225) dropped 1.4% and the yen rose about 0.7% to 127.95 per dollar, unwinding sharp moves that followed the Bank of Japan (BOJ) leaving monetary policy settings unchanged a day earlier.
The BOJ has pursued ultra-easy policy settings for decades in an attempt to generate inflation and growth, but markets doubt it can keep that up, and traders have been selling Japanese government bonds and buying yen to bet on a shift.
"There's an intense amount of speculation in the market that now that the January (BOJ) meeting has happened without any changes ... that we'll see something in March," said Shafali Sachdev, head of FX, fixed income and commodities in Asia at BNP Paribas Wealth Management in Singapore.
April was another possibility, she added, since by then the BOJ would have a new governor. "My guess would be that more speculators would look to build positions going into these meetings.
Speculators did, however, give some respite to the BOJ in the bond market. After four days of huge BOJ spending to reel 10-year yields back inside the target band of 0.5% either side of zero, the yield held at 0.41% on Thursday.
