Stocks were mostly higher in Asia on Tuesday after a mixed session on Wall Street dominated by speculation that the Federal Reserve could rein in financial markets and the economy by raising interest rates.
South Korea’s Kospi
180721
also increased by 1.3%. The Bank of Korea left interest rates unchanged at 3.5% for a second straight meeting, one of many regional banks now slowing or reversing rate hikes on signs of weakness in the global economy.
Hong Kong’s Hang Seng
HSI
added 0.1% while the Shanghai Composite Index
SHCOMP
0.3% lost. Australia’s S&P/ASX 200
XJO
1.3% up. Taiwan’s scale
Y9999
rose while shares in Singapore were little changed
STI
and Indonesia
JAKIDX
.
Monday was the first US trading day after the release of data showing a stronger-than-expected jobs market in March, which could keep inflation high. This has fueled expectations that the Fed could hike rates again at its next meeting.
In Japan, the new central bank governor indicated late Monday that he expects to keep his ultra-low interest rate policy in place without drastic changes.
Bank of Japan Governor Kazuo Ueda said a long-term policy review aimed at fostering stronger economic growth by keeping inflation near a 2% target may eventually be needed.
“The result is that Governor Ueda is not only making a temporary effort not to rock the political boat, but is currently stepping up the political course,” Mizuho Bank said in a comment.
It noted that “increasing risks of a global slowdown, coupled with monetary policy lags, mean the BOJ is keenly aware that any significant tightening now could be caught flat-footed by a global slowdown.”
The S&P 500 on Monday
SPX
rose 0.1% to 4,109.11. Big technology stocks fell more than the rest of the market, which helped drag the Nasdaq Composite
COMP
down less than 0.1% to 12,084.36. It was down as much as 1.4% earlier in the day. The Dow Jones Industrial Average
DJIA
was more stable, up 0.3% to 33,586.52.
The Fed has been raising interest rates at a rapid pace over the past year in hopes of undercutting high inflation. Higher interest rates can do that, but only by blatantly slowing the entire economy in one fell swoop. This increases the risk of a recession in the future and drags down stocks, bonds and other assets.
The Fed has hiked rates at each of its meetings over the past year, raising them from near zero in early 2022.
On Wednesday, the US government will release its latest monthly update on consumer-level prices across the economy. Economists expect inflation to have slowed over the past month but remains well above the Fed’s target.
In other trading Tuesday, US benchmark crude oil
CLK23
rose 54 cents to $80.28 a barrel in electronic trading on the New York Mercantile Exchange. It lost 96 cents to $79.40 on Monday.
Brent crude oil
BRNM23
,
the international price standard, rose 39 cents to $84.57 a barrel.
the dollar
USDJPY
slipped from 133.59 yen to 133.38 Japanese yen.
Comments are closed.