Asian shares mixed as markets eye US interest rates, prices

TOKYO (AP) — Asian shares were trading mixed Monday, as investors eyed surging energy costs and prospects for interest rate hikes in the U.S.

Benchmarks edged up in Japan and Australia, while falling in South Korea and China.

Some analysts worry that if the U.S. Federal Reserve raises interest rates too quickly, or by too much, that could set of a recession. A slowdown in the U.S. would almost certainly hurt the Asian region, which exports and manufacturers for the U.S. economy.

The Fed has said it will continue to raise interest rates to temper rising inflation. The benchmark short-term interest rate was at a record low of near zero during much of the coronavirus pandemic.

“Many others had spotted recession risk out in 2024, but we have been aggressive from the outset in our forecast for a potential U.S. recession this year,” said Clifford Bennett, chief economist at ACY Securities.

Japan's benchmark Nikkei 225 gained 0.2% in morning trading to 26,492.29. SoftBank Group stock rose despite reporting hefty losses on its investments last week. Retail chain Uniqlo also rose after falling in previous weeks on worries about the lockdown in China.

In other regional trading, Australia's S&P/ASX 200 edged up 0.2% to 7,092.30. South Korea's Kospi fell 0.1% to 2,601.41. Hong Kong's Hang Seng lost 0.2% to 19,851.63. while the Shanghai Composite shed 0.3% to 3,074.79.

Even if concern over interest rate increases has been allayed somewhat, investors are still watching closely for what Fed Chariman Jerome Powell might say next, said Stephen Innes, managing partner at SPI Asset Management.

“That does not mean the bear market is over, especially with the recession on everyone’s mind,” Innes said.

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