Asian shares mostly decline as bond market pressure mounts
[August 24, 2026] By
ELAINE KURTENBACH
BANGKOK (AP) — Asian shares were mostly lower and oil prices slipped on
Monday at the outset of a week capped by an annual meeting of top U.S.
economic officials at Jackson Hole, Wyoming.
U.S. futures edged lower.
In Tokyo, the Nikkei 225 fell 0.7% to 65,528.09, while South Korea’s
Kospi lost 3.1% to 6,696.96.
The Hang Seng in Hong Kong declined 1.8% to 25,555.11 and the Shanghai
Composite index gave up 0.6% to 3,882.01.
Australia's S&P/ASX 200 gained 0.5% to 9,103.10, bucking the regional
trend.
Taiwan's Taiex fell 1%.
Investors will get an important inflation update on Wednesday when the
U.S. releases its report on personal consumption expenditures, or PCE,
for July. It is the Federal Reserve’s preferred measure of inflation.
Much like the consumer price index, it has shown that the rate of U.S.
consumer inflation remains stubbornly above 3%.
The Fed has been struggling to get inflation back to its target rate of
2%. It came close in early 2025, but then inflation started creeping
higher as the U.S. imposed a wide range of tariffs globally. The rate of
inflation leaped higher in early 2026 as the Iran war curtailed global
oil shipments from the Strait of Hormuz.
Last week, rising bond yields forced the U.S. Treasury Department into
an unusual intervention and raised the specter of higher borrowing costs
weighing on consumer spending, the lifeblood of the economy. It also
sparked concerns that investors might finally be thinking twice about
financing a seemingly endless flow of government borrowing.
The bond markets got only temporary relief from Treasury Secretary Scott
Bessent’s announcement that the government would double its buybacks of
longer-term bonds. That was meant to bring down the 10-year Treasury
yield and lower mortgages. The 10-year yield rose back to 4.73% Friday,
matching its highest point in more than a year. It was at 4.71% early
Monday.
The 30-year Treasury yield, which the Fed is also targeting with its
bond repurchases, also rose and is near its highest level since 2007.
Higher yields can slow the economy and undercut prices for all kinds of
investments.
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A surveyor works in front of a stock market chart Monday, Aug. 24,
2026 in Tokyo. (AP Photo/Eugene Hoshiko)
 The bond market has remained jumpy,
and investors will be watching for signals from Federal Reserve Gov.
Kevin Warsh regarding rates and other policies in a key speech at
the annual gathering of U.S. economic leaders in Jackson Hole later
this week.
On Friday, the S&P 500 rose 0.4% for just its second gain in the six
days since setting its all-time high last week. The Dow Jones
Industrial Average jumped 1% and the Nasdaq composite climbed 0.4%.
Most U.S. companies have reported bigger profits for the spring than
analysts expected, helping push stocks to records. Stock prices tend
to follow the path of corporate profits over the long term.
Continued uncertainty about when the war with Iran will allow oil
tankers to freely exit the Persian Gulf again has roiled markets,
causing oil prices to rise and pushing up Treasury yields due to
worries over inflation.
The outlook remained murky early Monday, after the new head of
Iran’s top security body warned Sunday that Tehran will see any
country’s support for new U.S. economic measures against the Islamic
Republic as an “act of war,” while Iran’s president defended a
memorandum of understanding with the United States as the best way
out of the stalled conflict.
Early Monday, the price for a barrel of Brent crude oil fell 1.8% to
$92.67 per barrel. U.S. benchmark crude fell 2.3% to $85.05 per
barrel.
One of the biggest beneficiaries of Bessent’s move to try to bring
down longer-term bond yields is bitcoin. Cryptocurrencies often rise
when interest rates are lower and more money is flowing through the
financial system. Hopes for legislation in Washington to help the
crypto industry have also helped it.
Bitcoin was trading near $77,633 early Monday, according to CoinDesk.
In other dealings, the U.S. dollar bought 159.12 Japanese yen, up
from 158.94 yen late Friday. The euro fell to $1.1672 from $1.1678.
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