By Alun John

HONG KONG (Reuters – Asian shares managed to hold on to small gains thanks to a Wall Street session that was solid, but they still face their worst month for two years. China fears and looming U.S. interest rate increases dragged sentiment down and sent the safe haven dollar soaring.

MSCI’s largest index of Asia-Pacific shares, outside Japan, rose 0.2% Friday after strong earnings by parent Meta Platforms (NASDAQ:). The Nasdaq was 3% higher overnight. [.N]

Japanese markets close for holidays

Overall sentiment was weak with Nasdaq futures falling around 1% in Asia early trade. The pressure from disappointing earnings from Amazon after-market close had a negative impact on the Nasdaq.

Friday’s gains are marginal when compared with the recent brutal stock-market selloffs. Asian regional benchmarks are expected to see a decline of 2% this week and a drop of 7.3% in the month. This is its worst month since March 2020.

Shanghai stock markets rose 0.2% Friday but will see an 8.1% drop for the month. This is their worst performance since January 2016.

Fook-Hien Yap is a senior investment strategist at Standard Chartered Wealth Management (OTC:).

China’s Politburo meeting, which is expected to be the country’s top decision-making body, will be a key focal point as the markets seek more economic support. However, analysts claim Beijing’s Zero-COVID strategy is restricting policymakers’ choices as many supply chains have collapsed and workers’ movement has been curtailed.

Beijing shut down some public schools and places of worship on Thursday as the majority of its 22 million inhabitants turned out for mass COVID-19 tests to avoid a Shanghai-like lockdown.

U.S. Treasury yields are trading in their current ranges, just a bit below the peak they reached last week.

At 2.8205% the U.S. benchmark yield for 10 years ended its session. It had risen to 2.981% as of April 20. Two year yield stood at 2.613%. [US/]

Due to Friday’s holiday in Tokyo, they didn’t trade with Asia.

The currency markets were also volatile this week.

The was, which measures the greenback in relation to six major peers, was just a whisker softer at 103.56, after reaching 103.93 Thursday. This is its highest point since 2022.

Current monthly gains of 5.2% for the index would mark their highest level since 2012.

The safety-bid on the dollar has fueled the rally, as well as market expectations of 150 basis points rate increases in three Federal Reserve meeting. Global central banks are far more aggressive in tightening rates than the Fed, which is trying to curb sky-high inflation.

Recent gains by the dollar against the Japanese yen have been the most notable. On Thursday it passed the psychologically important 130 yen mark, setting a new 20-year high. Also, the dollar reached a 5-year record on the euro. [FRX/]

As traders dealt with supply and demand issues resulting from the conflict in Ukraine, oil prices were still volatile.

Although the price of a barrel fell 0.5% to 107.00 on Friday, it is still at its fourth consecutive month of gains. The price of a barrel fell 0.6% to $104.68. [O/R]

The price of an ounce rose by 0.36% to $1901.8 [GOL/]