Friday, August 12, 2022

Asian markets fall ahead of US holiday

TOKYO ( Associated Press) – Asian markets were mostly cautious on Monday ahead of the US federal holiday

Concerns over inflation and the risk of a global recession from central banks’ efforts to bring it under control overtook Wall Street’s positive close on Friday.

The price of the world’s most popular cryptocurrency It fell below the psychological benchmark of $20,000 to $20,742 in the early hours of Monday. According to crypto news site CoinDesk, bitcoin is down almost 10% over the weekend to fall below $18,600.

By mid-afternoon in Tokyo, it was at $19,837.14.

Shares fell in most major Asian markets, but edged higher in China, which, in a widely expected move, kept its 1-year and 5-year loan key rates unchanged.

Given China’s struggle to bring the outbreak under control and its already faltering economy, “rate cuts are likely in the coming months as we expect economic recovery under the COVID-zero policy.” will be slow., After this rate stagnation, the government should provide more fiscal stimulus,” Greater China’s Iris Pang, chief economist at ING, said in a commentary.

Japan’s benchmark Nikkei 225 slipped 1.7% to 25,534.68 in morning trade. Australia’s S&P/ASX 200 slipped 0.7% to 6,432.00. South Korea’s Kospi fell 2.1% to 2,389.69. Hong Kong’s Hang Seng gained 0.2% to 21,109.16, while the Shanghai Composite gained less than 0.1% to 3,317.69.

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China and Japan, two of the world’s three largest economies, are not involved in raising interest rates.

Last week, Japan’s central bank stuck to its zero interest rate policy, though comments by Bank of Japan Governor Haruhiko Kuroda were brushed off as indications of what Tokyo might do about the weaker yen.

A weak currency could help earnings for Japan’s export giants such as Toyota Motor Corp, but could also signal a fragile economy.

Kuroda expressed some concern about the lower yen and its impact on Japanese companies, but said he had no immediate plans to change monetary policy. This means a widening gap between interest rates and return on investment in Japan and the US, and the dollar continues to strengthen.

“It is inevitable that the US dollar should go up significantly while the Monarch is in place, but once the clothing shortage appears, it will come down. This will be one of the biggest market roller-coaster opportunities of any market at any time. Could be one of them,” said Clifford Bennett, chief economist at ACY Securities, in a commentary.

The US dollar was trading at 134.88 Japanese yen in the early hours of Monday, down from 134.96 yen. Euro price is $1.0526, up from $1.0498.

US markets are closed on Monday for the June twentieth holiday. But testimony on monetary policy by Federal Reserve Chairman Jerome Powell before the Senate Banking Committee and the House Financial Services Panel is scheduled for later this week.

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Wall Street closed out a rough turning week, little more. The S&P 500 rose 0.2% to 3,674.84. The Dow Jones Industrial Average fell 0.1% to 29,888.78, while the Nasdaq Composite climbed 1.4% to 10,798.35.

The Russell 2000 Index of smaller stocks rose 1% to 1,665.69.

Markets gear up for world with higher interest rates led by Federal Reserve move, high rates can reduce inflation, but they also carry the risk of recession by slowing the economy And push prices down for stocks, bonds, cryptocurrencies and other investments.

Last week, the Fed raised its key short-term interest rate to three times the normal amount for its biggest increase since 1994. It may consider another such major increase at its next meeting in July. A report on the US economy last week also showed industrial output was weaker than expected last month.

The yield on the 10-year Treasury bounced back from 3.30% late Friday to 3.23% on Friday.

Benchmark US crude was down 36 cents at $109.20 a barrel in energy trading. Internationally, Brent crude fell 42 cents to $112.70 a barrel.


Yuri Kageyama is on Twitter

Nation World News Desk
Nation World News Desk
Nation World News is the fastest emerging news website covering all the latest news, world’s top stories, science news entertainment sports cricket’s latest discoveries, new technology gadgets, politics news, and more.
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