Shares in Asia fell on Friday after Wall Street retreated on news that US inflation jumped 7.5 percent last month, raising expectations that the US Federal Reserve would need to move forcefully to cool the economy by increasing interest rates.
The S&P 500 sank 1.9 percent on the report that inflation was the hottest since 1982, while bond yields jumped as traders bet the Fed might have to apply the brakes to the economy with a bigger-than-usual interest rate hike next month.
Ten-year Treasury yields topped 2 percent for the first time since August 2019, Tradeweb said.
Asian economies also are feeling the heat of sharp price increases, with some such as New Zealand already moving to raise interest rates. Others are holding off: Central banks in Thailand, Indonesia and India this week opted to keep their benchmark rates unchanged.
Some countries in the region, such as China and Japan, are contending with higher prices and slow growth, and some are still entangled in COVID-19 outbreaks that are clouding the outlook for their recoveries from the pandemic.
The mild initial reactions to the price data outside the US suggest “markets may want to look towards economic data to guide expectations, considering that we have seen many central banks walked back on their inflation stance,” Yeap Jun Rong, market strategist at IG in Singapore, said in a commentary.
“We will be getting inflation readings out of China next week, which will be one to watch considering its impact on global prices,” he said.
In Taipei, the TAIEX closed down 27.11 points, or 0.15 percent, at 18,310.94. Turnover totaled NT$261.771 billion (US$9.4 billion).
For the week, the TAIEX rose 636.54 points, or 3.6 percent, after a decline of 3.08 percent last month.
Hong Kong’s Hang Seng Index on Friday slipped 0.07 percent to 24,906.66, up 1.36 percent on the week.
The Shanghai Composite Index gave up early gains, sinking 0.66 percent to 3,462.95, but posted a weekly increase of 3.02 percent.
In Sydney, the S&P/ASX 200 lost 0.98 percent to 7,217.3, rising 1.36 percent from a week earlier.
Seoul’s KOSPI in lost 0.87 percent to 2,747.71, declining 0.09 percent weekly.
India’s SENSEX dropped 1.31 percent to 58,152.92, losing 0.84 percent from a week earlier.
In Tokyo, markets were closed for the National Foundation Day holiday.
Additional reporting by staff writer, with CNA
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