World stocks eased slightly on Wednesday as markets weighed risks from U.S. House Speaker Nancy Pelosi's visit to Taiwan and comments from Federal Reserve officials talking up the chance of aggressive interest rate hikes. China furiously condemned the highest-level U.S. visit to Taiwan in 25 years as Pelosi pledged American solidarity to an island Beijing views as a breakaway province. Although China kicked off a burst of military activity in Taiwan's surrounding waters, investors took some comfort in expectations that Beijing's actions would remain demonstrative.
Stocks rose in volatile trading across Asia on Wednesday and the dollar pared early gains as investors weighed the potential fallout from U.S. House Speaker Nancy Pelosi's visit to Taiwan, which has angered China. Bond yields were also helped as demand for the safest assets eased despite heightened tensions between the United States and China, which views Taiwan as a breakaway province. "In the longer term, there will be more frictions between the U.S. and China," said Redmond Wong, Greater China market strategist at Saxo Markets in Hong Kong.
With interest in living in mainland China and Hong Kong plunging, other Asian destinations are drawing away expatriate talent.