Investors look at information displayed on electronic screen at a brokerage house in Shanghai, China, June 29.Aly Song/Reuters
The euro slipped with emerging-market currencies as Greek voters' rejection of austerity sent investors to the relative safety of Treasuries and the yen. Chinese stocks jumped after the country stepped up efforts to arrest a $3.2 trillion equity selloff.
The euro was weaker against all 16 major peers by 10:36 a.m. in Tokyo, dropping 0.6 percent versus the dollar and gold, and 0.8 percent to the yen. The yield on 10-year Treasuries plunged nine basis points, while rates on Australian and Japanese notes also fell. Asian shares outside China dropped amid the flight to safety. The Shanghai Composite Index surged 5.9 percent in early trade after the government teamed with brokerages to defend the equity market. Malaysia's ringgit fell to a 10-year low.
More than 60 percent of Greek voters rejected austerity measures demanded by creditors for a bailout package. Greece's exit from the currency union is now the base-case scenario, JPMorgan Chase & Co. said, with European leaders calling for a summit. China suspended initial public offerings and brokerages pledged to buy shares in weekend measures aimed at halting the steepest plunge in local stocks since 1992.
"It's definitely risk off, markets don't like uncertainty," Kumar Palghat, managing director of Kapstream Capital Ltd., which oversees the equivalent of about $6.9 billion in Sydney, said in a Bloomberg TV interview. "The question from the market is, is this going to continue or are they going to come up with a solution? China is more important to Asia than Greece is, but remember we live in a globalized world, so what happens in Greece affects other countries and other regions as well."
Polls Wrong
With all of the vote counted, support for the "no" camp was at 61 percent, while 39 percent voted "yes" to the demands, according results on the Greek Interior Ministry website. A poll commissioned by Bloomberg had 43 percent voting "no" and 42.5 percent intending to accept creditors' conditions. The survey had a three percentage-point margin of error.
Yields on 10-year Treasuries fell 0.09 percentage point to 2.29 percent in their first day of trading since Thursday. American markets resume Monday following the Fourth-of-July holiday.
Similar maturity Japanese debt yielded 0.46 percent, down two basis points, while rates on Australian bonds due in a decade declined 14 basis points to 2.93 percent, set for their lowest close since June 19. A gauge of credit risk across Asia rose to an almost six-month high as the referendum result became clear.
'Big Surprise'
"This is a big surprise, the market definitely expected it was going to be close," Clem Miller, an investment strategist at Wilmington Trust, which manages $20 billion, said by phone from Baltimore. "We're going to see a lot of volatility. Everything's going to get hit with the exception of safe-haven bonds."
German debt may surge as investors seek out haven assets following the vote, according to ING Groep NV. Ten-year bund yields finished at 0.79 percent in London Friday, down from 0.92 percent on June 26.
The ringgit slid as much as 0.9 percent to 3.8142 per dollar, its weakest level since a dollar peg was scrapped in 2005. Currencies from South Africa to Turkey lost at least 0.4 percent.
China Measures
While Greece accounts for less than 2 percent of the euro zone's output, an exit would set a precedent for other nations that membership is reversible. The country's immediate fate lies with the European Central Bank, which may take its cues from European Union leaders as to whether it can keep emergency loans flowing to Greece without the prospect of a bailout package. The ECB is set to meet Monday.
In China, 28 companies halted their IPOs, according to filings to the nation's two exchanges Saturday. A group of 21 brokerages led by Citic Securities Co. will invest at least 120 billion yuan ($19.3 billion) in a stock-market fund, the Securities Association of China said the same day. Executives from 25 mutual funds vowed to buy shares and hold them for at least a year, according to an industry group association.
The weekend announcements come as the government battles to restore faith among the nation's 90 million individual investors after a slew of measures by regulators, including a pledge to investigate market manipulation, failed to stem declines.
The Shanghai Composite Index, one of the world's best- performing equity gauges the past six months, has tumbled 29 percent since mid-June, erasing about $3.2 trillion of value from the market on concern leveraged traders are liquidating bets after valuations exceeded levels seen during China's stock- market bubble of 2007.