HONG KONG, Sept 25 — Asian markets were mixed today after recent oil price surges, as US and Japanese bond yields hit multi-year highs with no clear end in sight for the Middle East war.

A two-month extension of a trade truce between the US and China left several issues unresolved, analysts said, shifting lingering risks into the future.

Oil prices eased slightly on today, with Brent Crude shedding 0.8 per cent after spiking more than three per cent yesterday to extend previous gains.

Global stocks had mostly fallen yesterday, as the benchmark US 10-year Treasury yield rose to its highest level since 2007, and the 30-year yield reached its highest since 2004.

Japan’s 10-year yield also reached a fresh 30-year high today.

“Bond yields are bouncing around like a see-saw,” Kathleen Brooks, research director at XTB, wrote in a note.

“There is no clear direction for markets,” she said, listing unknown factors such as “are we in a bond crisis or not?” and “Is the Iran war getting worse or is the situation improving?”

“While these questions remain unanswered, volatility will continue to dominate, especially in the commodity and bond markets,” Brooks said.

Tokyo closed 1.3 per cent higher, but Hong Kong fell 1.3 per cent, with Sydney and Jakarta also down. Shanghai, Taipei and Seoul were closed for holidays.

London opened 0.6 per cent higher, with Frankfurt and Paris up too.

Stock dips this week have been mild, along with “fairly moderate” movements in foreign exchange markets despite a “clear preference for the dollar”, Brooks said.

Japanese Finance Minister Satsuki Katayama told reporters that US President Donald Trump had expressed concerns over the weak yen during a bilateral meeting in Washington this week.

Meanwhile Trump hosted China’s Xi Jinping for a lavish state dinner at the White House yesterday, after a day of pomp and ceremony that masked deep tensions between the rival superpowers.

While business was on the menu at the state dinner, expectations of any major breakthroughs from Xi’s visit were low.

One minor success — the extension of a trade truce by two months until January — was less than the two years that the Chinese had been hoping for.

Lloyd Chan at MUFG said that “renewed geopolitical risks in the Middle East are occurring against an already tight oil-market backdrop, raising concerns over both supply and inflation”.

“Meanwhile, US-China trade risks remain in the background,” he added.

“The trade truce has been extended by just two months to 10 January, leaving issues over tariffs, agricultural purchases, rare earths, and technology restrictions unresolved.” — AFP