Asian Stocks Rebound after BOE Launches Bond-Buying Program

Asian stocks bounced back on Thursday following a rebound on US Wall Street overnight after the Bank of England announced an emergency bond buying program to stabilize a furious sell-off in gilts.

As of 9.31 a.m. Thai time, Hong Kong’s Hang Seng index jumped 1.49%. In South Korea, the Kospi added 1.27%.

The Nikkei 225 in Japan advanced 0.34%. Australia’s S&P/ASX 200 gained 1.57%.

In mainland China, the Shanghai Composite rose 0.73%.

Overnight in the US, the Dow Jones Industrial Average rose 548.75 points, or 1.88%, to 29,683.74. The S&P 500 gained 1.97% to 3,719.04. The Nasdaq Composite was 2.05% higher at 11,051.64 at the close.

The Bank of England on Wednesday said it will step in to prevent bond selloff and that it would buy as many long-dated government bonds as needed to stabilize financial markets after a chaos broke out on the recent proposal of the new government’s so-called mini-budget that includes a not-so-mini tax cuts.

The program of buying long-dated government bonds will start from today to October 14.

Prior to the announcement from the BoE, British 30-year bond yields hit its highest level since 2022 as the central bank stated that it had no choice but to intervene.

The government’s 30-year yields and 10-year yields started to decline after the announcement.