Asian stocks slip as global bond selloff continues

TOKYO (Bloomberg) - Asian stocks retreated as the selloff in global bonds accelerated, with Japanese yields rising to their highest level since March. New Zealand's dollar strengthened amid a surge in retail sales, while oil extended losses.

The MSCI Asia Pacific Index lost 0.1 per cent by 9:27 a.m. in Tokyo, falling from a one-week high as Japan's Topix index slipped 0.3 per cent. Yields on 10-year Japanese government debt climbed for a third day, to 0.46 per cent, while Australian bond rates jumped six basis points. The kiwi added 0.7 per cent as the Bloomberg Dollar Spot Index maintained declines at an almost four-month low. U.S. oil slipped for a second day, while crops climbed.

Concern sovereign debt sales are swamping demand is exacerbating the worldwide bond slump, which has seen more than US$400 billion in value erased from the market in about three weeks. U.S. producer prices and jobless claims are due Thursday, after a stagnant retail sales report cast doubt on the economy's recovery and the timeline for the Federal Reserve to start raising interest rates. Japan posts data on machine-tool orders and the Philippines reviews borrowing costs.

"I expect global yields to rise for the rest of the month - bonds were overbought," said Mitsushige Akino, executive officer at Ichiyoshi Asset Management Co. in Tokyo. "That said, escaping deflation is no easy task, and there's no change to the view that monetary easing from the ECB will continue."