Asian shares decline after Fed chief's comments on inflation
TOKYO (AP) — Asian shares mostly fell Friday, tracking losses on Wall Street after Federal Reserve Chair Jerome Powell indicated increases in interest rates must be faster to fight inflation.
Major indexes cascaded downward in Asia. Japan's consumer price index data showed an increase for the seventh consecutive month, although the results were within market expectations.
Japan’s benchmark Nikkei 225 dipped 1.6% in afternoon trading to 27,106.56. Australia’s S&P/ASX 200 dropped 1.6% to 7,473.30. South Korea’s Kospi shed 0.7% to 2,707.96. Hong Kong’s Hang Seng slipped 0.2% to 20,638.33, while the Shanghai Composite recouped earlier losses to edge up 0.4% to 3,091.79.
Japanese Finance Minister Shunichi Suzuki made comments seen as a slightly more forceful pushback against “sudden movements" in exchange rates after meeting with Treasury Secretary Janet Yellen on the sidelines of G-20 finance ministers’ meetings.
The U.S. dollar fell to 127.91 Japanese yen early Friday from 128.36 yen. The euro cost $1.0850, inching up from $1.0840.
An intervention, particularly from the U.S., may be coming, said Stephen Innes at SPI Asset Management.
"The BOJ is likely to remain steadfast in its approach to ultra-dovish monetary policy relative to its peers that implicitly welcomes yen depreciation,” he said, referring to Japan's central bank.
But the main cause of the dollar's surge against the yen and other currencies — a growing gap between interest rates in Japan and some other Asian countries and rising U.S. interest rates — is unlikely to abate.
In a panel discussion held by the International Monetary Fund, Fed Chair Jerome Powell said the Fed must move faster than it has previously to tackle high inflation, which suggests sharp interest rate increases are likely in coming...
