Most Asian markets dropped on Friday, trailing Wall Street losses triggered by the US Federal Reserve boss signaling an aggressive monetary policy tightening cycle and the ongoing economic impact of COVID-19 restrictions in China.
Tokyo’s Nikkei 225 closed 1.63 percent down at 27,105.26, even as inflation data from Japan was in line with market expectations and better than elsewhere in the world.
A falling yen, due mainly to the interest rate gap between Japan and the US, had boosted trade on the Nikkei 225 all of this week, but it was not enough to alleviate concerns around the prospect of rate hikes in the US, and the index only posted a slight weekly gain of 0.04 percent.
Photo: AP
The broader TOPIX declined 1.19 percent to 1,905.15, but rose 0.47 percent from a week earlier.
A report that Japanese Minister of Finance Shunichi Suzuki and US Secretary of the Treasury Janet Yellen have discussed coordinated currency intervention to combat skyrocketing global inflation strengthened the yen on Friday.
In Taipei, the TAIEX closed down 102.86 points, or 0.6 percent, at 17,025.09, but gained 0.12 percent weekly. Turnover totaled NT$268.201 billion (US$9.17 billion).
Seoul’s KOSPI lost 0.86 percent to 2,704.71, increasing 0.32 percent from a week earlier.
Australia’s S&P/ASX 200 dropped 1.57 percent to 7,473.3, posting a weekly decline of 0.67 percent, while India’s SENSEX lost 1.23 percent to 57,197.15, down 1.96 percent on the week.
However, the Shanghai Composite Index gained 0.23 percent to 3,086.92 as some restrictions in China were eased and the country’s securities regulator pushed banks and insurers to buy more stocks to lift ailing equities — although the effect was minimal. The index posted a weekly decline of 3.87 percent.
Hong Kong, which has been down all week and plummeted on Friday, recovered slightly after the midday break thanks to a tech stock recovery and was only 0.21 percent lower at 20,638.52 at the close. It was down 4.09 percent for the week.
Fed Chairman Jerome Powell’s comments that a half-point interest rate increase is “on the table” for next month’s policy meeting — with the US facing decades-high inflation — reversed fortunes on Wall Street mid-session.
“Federal Reserve Chairman Powell stopped an intraday equity rally in its tracks overnight, after he signaled a 0.5 percent rate hike in May,” said Jeffrey Haley, senior market analyst for Asia-Pacific at Oanda Corp.
“Mr Powell cited a tight labor market and inflation at multi-decade highs. Fellow President Mary Daly also suggested 0.50 percent hikes, while the bull in the monetary China shop, James Bullard, reiterated his enthusiasm for 0.75 percent hikes,” Haley said.
Additional reporting by staff writer, with CNA
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