TOKYO (AP) — Asian stocks were mostly lower on Wednesday after another volatile day on Wall Street as traders braced for fresh data on inflation and corporate earnings.
Indicators fell in Tokyo
and Hong Kong
but rose in Sydney.
South Korean Kospi
lost 0.1% to 2,189.86 after the Bank of Korea raised its key rate by 0.5 percentage point amid a U.S. Fed rate hike and rising inflation risks due to a weak won and recovery in global oil prices.
In currency trading, the Japanese yen fell to a 24-year low against the US dollar
at 146 yen, raising expectations of another intervention by Tokyo to support the yen. A dollar by noon
was 146.17 yen, compared with 145.80 on Tuesday evening. Euro
was 96.96 cents, down from 97.07 yen.
A weaker yen raises costs for both consumers and businesses that rely on imports for food, fuel and other necessities, but the greater purchasing power of foreign currencies is expected to boost tourism. Japan fully reopened to individual tourist travel this week after being closed for more than two years due to the pandemic.
Japan’s benchmark Nikkei 225 index lost 0.2% to 26,348.73 in morning trading. Australian S&P/ASX 200 index
up nearly 0.2% to 6,656.00. Hong Kong’s Hang Seng fell 2% to 16,491.39, while the Shanghai Composite fell 1.2% to 2,943.24.
The S&P 500 on Tuesday
fell 0.7%, marking its fifth straight loss, to close at 3,588.84. Nasdaq
fell 1.1% to 10,426.19. Dow Jones industrial index
added 0.1% to 29,239.19, while the Russell 2000 index
rose 1 point, or about 0.1%, to 1,692.92.
Recession fears are weighing heavily on markets as stubbornly hot inflation burns businesses and consumers. Economic growth is slowing as consumers hold back spending and the Federal Reserve and other central banks raise interest rates.
International Monetary Fund on Tuesday lowered the global economic growth forecast in 2023 to 2.7%, compared with 2.9% estimated in July. The cuts come at a time when Europe faces a particularly high risk of recession with energy costs soaring amid Russia’s invasion of Ukraine.
Wall Street is closely watching the Federal Reserve, which continues to aggressively raise the benchmark interest rate to make borrowing more expensive and slow economic growth. The goal is to cool inflation, but the strategy carries the risk of slowing the economy too much and pushing it into recession.
“The market is desperate for a reason for the Fed to stop tightening, and recent data hasn’t given them that revelation on inflation,” said Willie Delwich, investment strategist at All Star Charts.
decreased by 4%.
down 10.4% and Lyft
Fed will publish the minutes of the last meeting on Wednesday, which may give Wall Street more clarity on its views on inflation and next steps.
Investors still expect the Fed to raise the overnight rate by three-quarters of a percentage point next month, the fourth such hike. This triples the usual amount and will bring the rate to the 3.75% to 4% range. The year started almost from scratch.
The government will also release its wholesale prices report on Wednesday, providing an update on how inflation is hitting businesses. The consumer price report will be released on Thursday and the retail sales report on Friday.
“Everybody is still hoping that every inflation report will show that the pressures are easing,” Delwich said.
Wall Street is also preparing for the start of the latest season of corporate earnings reports, which could provide a clearer picture of the impact of inflation.
Among the companies reporting quarterly results this week: PepsiCo
Delta Air Lines
and Domino’s Pizza
Banks, including Citigroup
and JPMorgan Chase
will also report the results.
In energy trade, the benchmark is US crude oil
in electronic trading of the New York Mercantile Exchange fell by 82 cents to 88.53 dollars per barrel. Oil prices in the US fell 2% on Tuesday. Brent oil
in international pricing standards decreased by 62 cents to 93.67 dollars per barrel.
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