Asian shares tumbled on Wednesday as markets wagered the Federal Reserve would raise interest rates earlier than expected, sending U.S. bond yields higher and keeping the dollar well bid near 14-month highs against a basket of major currencies.
Some of the regional tech shares took a hit after Apple Inc stock (AAPL.O) fell as the initial excitement over its announcement of new products including a watch, larger iPhones and a mobile payment service, quickly evaporated. Japan’s Nikkei dropped 0.4 percent .N225 while MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS slipped 1.1 percent. If sustained, it would mark the largest fall for the regional index in nearly six months.
On Wall Street, Apple’s decline and higher bond yields pushed stocks down. The S&P 500 .SPX lost 0.7, the Dow .DJI fell 0.6 percent and the Nasdaq Composite .IXIC dropped 0.9 percent. The dollar remained well bid after economists at the San Francisco Fed shocked markets by publishing a paper saying investors expects a slower rate hikes than the U.S. policymakers themselves expect.