* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* Turkish lira skids as Erdogan dumps central banker
* Stocks, bonds show limited fallout so far
* Yen makes modest gains, eyes on Japanese retail investors
* Oil prices fall anew, after steep slide last week
By Wayne Cole
SYDNEY, March 22 (Reuters) - Asian markets were holding
their nerve on Monday as a plunge in the Turkish lira tested
risk appetite, with stocks and bonds showing only a limited bid
for safe-havens.
The dollar was trading 12% higher on the lira TRYTOM=D3 at
8.100, but that was off an early peak of 8.4850 amid speculation
Turkish authorities would intervene to stem the rout.
The slide came after President Tayyip Erdogan shocked
markets by replacing Turkey's hawkish central bank governor with
a critic of high interest rates. "Erdogan's decision to fire Governor Agbal, who had sought
to instil some price stability and perception of Bank
independence, now raises question as to whether the new Governor
will look to lower rates while still aim to fight higher
inflation," said Rodrigo Catril, a senior FX strategist at NAB.
After an initial wobble, sentiment seemed to stabilise and
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS was all but flat.
Japan's Nikkei .N225 fell 1.4%, not helped by talk
Japanese retail investors could face losses on large long
positions in the high-yielding lira.
Nasdaq futures NQc1 bounced to be up 0.1%, while S&P 500
futures ESc1 were off a slight 0.1%. Yields on 10-year
Treasury notes US10YT=RR edged down a couple of basis points
to 1.71%, suggesting no widespread rush to safety.
Investors are still struggling to deal with the recent surge
in U.S. bond yields, which has left equity valuations for some
sectors, particularly tech, looking stretched.
Bonds had another wobble on Friday when the Federal Reserve
decided not to extend a capital concession for banks, which
could lessen their demand for Treasuries. The damage was limited, however, by the Fed's promise to
work on the rules to prevent strains in the financial system.
A host of Fed officials speak this week, including three
appearances by Chair Jerome Powell, providing plenty of
opportunity for more volatility in markets.
WATCHING EMERGING MARKETS
Monday's tumble in the lira saw the yen firm modestly, with
gains on the euro EURJPY= and Australian dollar AUDJPY= .
That in turn dragged the euro down slightly on the dollar to
$1.1889 EUR=D3 .
After an initial slip, the dollar soon steadied at 108.86
yen JPY= , while the dollar index was a shade higher at 92.080
=USD .
Also supporting the yen were concerns Japanese retail
investors that have built long lira positions, a popular trade
for the yield-hungry sector, might be squeezed out and trigger
another round of lira selling.
Still, analysts at Citi doubted that episode would lead to
widespread pressure on emerging markets, noting the last time
the lira slid in 2020, there was little spillover.
"In terms of impact on other parts of the high-yielding EM,
we believe that will be quite limited," Citi said in a note.
There was scant sign of safe-haven demand for gold, which
eased 0.3% to $1,739 an ounce XAU= .
Oil prices fell anew, having shed almost 7% last week as
concerns about global demand prompted speculators to take
profits on long positions after a long bull run. O/R
Brent LCOc1 was off 53 cents at $64.00 a barrel, while
U.S. crude CLc1 lost 55 cents to $60.87 per barrel.
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