Most Asian share indices are heading for weekly losses as bond market stress persists, prompting investors to pivot toward safe-haven assets such as Bitcoin and gold. The market movements reflect a broader flight from risk, driven by rising Treasury yields that have impacted equities in both Asia and the United States.
Japan’s Nikkei dropped 0.8% to open Friday's trading, extending its weekly loss to 4.4% before recovering slightly. South Korea and Taiwan finished the week lower, following a sharp Kospi sidecar halt earlier in the week, while the broader MSCI Asia-Pacific index outside Japan managed only a 0.5% gain.
The sell-off stems from rising US Treasury yields. The 30-year yield rose to 5.25%, and the 10-year yield reached 4.71%. Secretary Scott Bessent stated that the government could expand bond repurchases and floated fiscal consolidation, though analysts remain skeptical about Washington's ability to find sufficient spending cuts to narrow the deficit. The US deficit is currently running above 6% of GDP, with interest payments projected to top $1.2 trillion this year.
Deutsche Bank strategist Steven Zeng noted that historically, markets push back when they believe fundamentals, such as record debt levels and large deficits, are on their side, and that further interventions could become too costly to bear. Additionally, Brent crude added regional pressure, touching a one-month high of $94.71 a barrel before easing to $93.12 following toughened US sanctions threats against Iran.
While Asian equities struggled, Bitcoin and gold moved higher. Bitcoin traded near $74,300 on Friday after touching an intraday high of $75,500. Gold held near $4,513 an ounce, marking a 3.1% gain for the week. Treasury's expanded buyback plans fueled a debasement narrative, bringing JPMorgan’s $5,000 gold target into view and reviving the case for Bitcoin as a weaker-dollar hedge, a view supported by VanEck strategists.
Wall Street experienced similar bond stress as US stocks fell sharply on Thursday after buyback relief faded. The Dow dropped 703 points, Walmart fell 9% on soft US sales, the S&P 500 was down 1.9% for the week through Thursday, and the Nasdaq fell 2.5%, though futures pointed modestly higher on Friday. Nvidia’s upcoming results and the dollar index sitting near a three-month low, down almost 0.9% for the week, remain key focal points for investors.
