Volkswacht Bodensee - European stock markets rise as US bond yields surge

Tokyo tanked as trading resumed after a long weekend and after deep falls on Wall Street Tuesday, while European markets rose slightly approaching the half-way stage Wednesday.

The yen traded around 149 to the dollar after hitting 150.16 Tuesday, its weakest level in a year.

World oil prices slid before a meeting of OPEC+ crude producers.

Crude futures have fallen sharply since last week when they threatened to hit $100 a barrel, easing concerns over high inflation.

- Gloomy -

Markets were slammed Tuesday by a shock US labour report, known as JOLTS, showing a surprise increase in the number of job openings to 9.6 million.

That was taken by investors as a sign of continued tightness in the labour market, fuelling worries of a further rate hike by the US Federal Reserve before year's end.

"It feels gloomy right now with a 'higher rates for longer' assumption helping to sour sentiment," said Russ Mould, investment director at trading firm AJ Bell.

"This is reflected in the sell-off in bonds -– with US government bond yields hitting levels last seen in 2007."

Following the JOLTS update, 10-year US Treasury note yields climbed to levels last seen in 2007.

Treasury bond yields are seen as a proxy for US interest rates and are closely watched.

Germany's 10-year bond yield hit three percent, a level not seen since 2011.

Markets were looking ahead to Friday's highly-anticipated US employment report for September.

All three major US indices closed in the red Tuesday, falling by more than one percent as the bond sell-off hit global equity markets, although Europe pulled back into gains on Wednesday.

"Chill winds of worry are swirling about high interest rates settling in and there is set to be little respite from the sell-off," said Susannah Streeter, head of money and markets at stockbroker Hargreaves Lansdown.

"This fresh bout of anxiety has been prompted by new jobs data in the US indicating that vacancies unexpectedly jumped in August."

Tokyo and Seoul, which resumed trade after a long holiday weekend, led the Asian sell-off Wednesday.

Markets in mainland China were closed for a week-long holiday.

Japan's top finance officials declined to comment Wednesday on whether Tokyo had intervened to support the yen after it had breached the psychological 150 level.

The yen has plummeted against the dollar in recent months in part because of the widening gap in interest rates set by the Bank of Japan and the Fed.

- Key figures around 1045 GMT -

London - FTSE 100: UP 0.1 percent at 7,479.58 points

Frankfurt - DAX: UP 0.1 percent at 15,095.38

Paris - CAC 40: UP 0.3 percent at 7,019.68

EURO STOXX 50: UP 0.3 percent at 4,106.86

Tokyo - Nikkei 225: DOWN 2.3 percent at 30,526.88 (close)

Hong Kong - Hang Seng Index: DOWN 0.8 percent at 17,195.84 (close)

Shanghai - Composite: Closed for a holiday

New York - Dow: DOWN 1.3 percent at 33,002.38 (close)

Dollar/yen: UP at 149.11 yen from 149.02 yen Tuesday

Euro/dollar: UP at $1.0511 from $1.0467

Pound/dollar: UP at $1.2137 from $1.2077

Euro/pound: DOWN at 86.60 pence from 86.66 pence

Brent North Sea crude: DOWN 1.6 percent at $89.45 per barrel

West Texas Intermediate: DOWN 1.7 percent at $87.75 per barrel

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T.Germann--VB