Japanese stocks, US bond yields fall on growth concerns
By Hideyuki Sano
TOKYO (Reuters) – Japanese stocks skid to two-month lows on Tuesday as heightened concerns about the health of the world economy unnerved investors, triggering a shift in funds to safe havens such as U.S. bonds.
The U.S. Federal Reserve is expected to wind up its bond buying scheme later this month – another reason for investors to be cautious on stocks as the completion of the Fed's two previous quantitative easing programmes triggered a major correction in Wall Street shares.
U.S. S&P 500 was traded on Monday, and fell 1.7 percent to a five-month low, its worst three-day slide since November 2011.
The volatility index rose to 24.6 percent, the highest level since June 2012, when the world's financial markets were rattled by the European sovereign debt crisis, encouraging investors to flock to the safety of government debt.
The U.S. dollar stumbled after a months-long rally as concerns over the global growth outlook undermined the case for an earlier start to the Fed's rate-tightening cycle.
The dollar moved little on Tuesday with the dollar index standing at 85.347, off a four-year high of 86.746 hit earlier this month.
The euro traded at $1.2716 while the yen stood at 107.10 per dollar.
Brent oil futures traded at $88.23 per barrel, not far from a four-year low $87.74 hit on Monday.