By Kevin Buckland
TOKYO (Reuters) – Asian stocks slumped on Wednesday as a sharp rise in U.S. bond yields unnerved investors ahead of key inflation data that could inform the pace of Federal Reserve policy easing.
Short-term Treasury yields edged up after jumping to the highest since late July on Tuesday as the market reopened after the Veterans Day holiday, spurring the U.S. dollar to a more than three-month peak versus the yen.
Bond yields have soared since Donald Trump was elected back to the White House last week on expectations lower taxes and higher tariffs will increase government borrowing and push up the fiscal deficit. Trump’s proposed policies are also seen by analysts as fuelling inflation, potentially impeding the path to lower Fed interest rates.
Those same expectations had propelled U.S. stocks to record highs, but the rally stalled overnight as bond yields soared.
“It all continues to be a part of the Trump trade,…
