Asian shares track Wall Street's inflation-fueled retreat

TOKYO (AP) — Shares dropped sharply in Asia on Thursday after a broad retreat on Wall Street triggered by dismal results from major retailer Target that added to worries over persisting high inflation.

Shares fell in all regional markets except Indonesia's. Oil prices were higher.

The Dow Jones Industrial Average sank more than 1,100 points, or 3.6%, and the S&P 500 had its biggest drop in nearly two years Wednesday, shedding 4%. That was its steepest decline since June 2020. The tech-heavy Nasdaq fell 4.7%.

The benchmark index is now down more than 18% from the record high it reached at the beginning of the year. That's shy of the 20% decline that's considered a bear market.

“The sentiment in the market is highly negative as traders and investors are largely concerned about an economic downturn and soaring inflation," Naeem Aslam of Avatrade said in a commentary.

The Federal Reserve is trying to temper the impact from the highest inflation in four decades by raising interest rates. Many other central banks are on a similar track. But the Bank of Japan has stuck to its low interest rate policy and the gap between those benchmark rates of the world's largest and third-largest economies has pushed the dollar's value up against the Japanese yen.

Japan recorded a trade deficit in April as imports ballooned 28% as energy prices soared amid the war in Ukraine and the yen weakened against the dollar.

Japan’s exports grew to 8.076 trillion yen ($63 billion) last month, up 12.5% from the previous year, according to Ministry of Finance data released Thursday. Imports totaled 8.915 trillion yen ($70 billion) in April, up from 6.953 trillion yen in April 2021, and the highest since comparable numbers began to be taken in 1979.

The Nikkei 225 in Tokyo lost 1.9% to 26,395.81...