ALSO READAsia shares down, euro pressured by doubts over Trump's policies, French election Asia shares shaky as Trump bets keep emerging markets under pressure Asia shares win reprieve as bond rout pauses for now Asia stocks, dollar wrestle with US election risk Asia stocks subdued, dollar slips on US election tension
By Wayne Cole
SYDNEY (Reuters) - Sterling stole the show in Asia on Wednesday amid speculation Britain's surprise decision to call a snap election could ultimately deliver a more market-friendly outcome in its divorce from the European Union.
Safe-havens stayed in favour as gold and bonds climbed ahead of presidential elections in France and on escalating tensions between the United States and North Korea.
Equities were largely sidelined with MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> off 0.1 percent to the lowest since mid-March.
Japan's Nikkei <.N225> eased 0.2 percent, in line with losses across the region.
Sterling surged to a more than six-month top against the dollar after British Prime Minister Theresa May called an early general election for June 8, seeking to strengthen her party's majority ahead of Brexit negotiations.
"We expect that the PM's gamble is likely to buy her more time as well as room for manoeuvre in the Brexit negotiations as she will depend less on fringe groups in her own party," said Citi's chief global political strategist, Tina Fordham.
"That may reduce the risk of a negotiation failure and thus 'chaotic Brexit', but also of the UK remaining in the Single Market in the long-term or even reversing the decision to leave the EU."
The pound was lording it at $1.2846
Dollar selling spilled out broadly, sending the euro up to a three-week high at $1.0731
The dollar was also undermined by an eroding interest rate advantage as U.S. bond yields dived to five-month lows.
Yields on 10-year Treasury paper sank to 2.17 percent
A run of disappointing U.S. economic data and doubts the Trump administration will progress with tax cuts have quelled expectations of faster inflation and boosted fixed-income debt.
That, in turn, has taken the steam out of Wall Street. The Dow <.DJI> fell 0.55 percent on Tuesday, while the S&P 500 <.SPX> lost 0.29 percent and the Nasdaq <.IXIC> 0.12 percent.
In commodity markets, the urge for safety helped lift gold
Oil prices slipped as U.S. crude stockpiles fell by less than expected and a U.S. government report said shale oil output in May was likely to post the biggest monthly increase in more than two years.
(Editing by Sam Holmes)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)