Shares in most of Asia fell on Friday after surging US bond yields renewed selling pressure on high-flying technology companies.
Investors were disappointed with remarks by US Federal Reserve Chairman Jerome Powell on Thursday, when he said US inflation would likely pick up in the coming months, although he cautioned that the increase would be temporary and would not be enough for the Fed to alter low-interest rate policies set to help the economy recover from the COVID-19 pandemic.
Powell did not say that the Fed might seek to rein in rising bond yields, which tend to draw money out of stocks into less risky bonds.
Investors were hoping for “a little more hand holding” from Powell, Stephen Innes of Axi said in a commentary. “Powell is doing the bare minimum here, while simultaneously hinting at a lift-off level that could be a lot nearer on the horizon than suspected only a few weeks ago.”
That angst has spilled into world markets, which have thrived on massive monetary stimulus from the world’s central banks.
However, most markets in Asia recovered some of their losses late in the day.
The TAIEX on Friday lost 0.32 percent to 15,855.23, taking its weekly loss to 0.62 percent.
Japan’s Nikkei 225 on Friday lost 0.2 percent to 28,864.32, down 0.4 percent on the week. The TOPIX rose 0.6 percent on Friday, taking its weekly gain to 1.7 percent.
The Hang Seng in Hong Kong on Friday gave up 0.5 percent to 29,098.29, but added 0.4 percent for the week.
South Korea’s KOSPI shed 0.6 percent to 3,026.26, paring its weekly gain to 0.44 percent.
Australia’s S&P/ASX 200 on Friday sank 0.7 percent to 6,710.80, but rose 0.6 percent for the week.
The Shanghai Composite Index fell less than 0.1 percent at 3,501.99 after Chinese Premier Li Keqiang (李克強) announced an annual growth target of “more than 6 percent” at the opening of the annual session of the ceremonial national legislature.
Investors are watching for any changes in policy direction from the Chinese National People’s Congress, in particular moves to rein in government spending or tighten monetary policy that might affect markets.
Additional reporting by staff writer
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