Asian stock markets tumbled Friday after Federal Reserve Chairman Jerome Powell suggested that interest rates need to be raised sooner to fight inflation, with Wall Street recording losses. Asia’s major indexes fell, with Tokyo’s drop nearly his 2%. Japan’s consumer price index data showed its seventh consecutive month of gains, although results were within market expectations. Japan’s benchmark Nikkei 225 fell 1.9% to 27,033.33. Australia’s S&P/ASX 200 dropped his 1.6% to 7,468.30. South Korea’s Kospi fell 1.2% to 2,696.72. Hong Kong’s Hang Seng fell 1.1 per cent to 20,454.17 and the Shanghai Composite he fell 0.3 per cent to 3,071.63.
“The Bank of Japan tacitly welcomes a weaker yen and is likely to stick to an ultra-dovish monetary policy approach compared to peers,” Jerome said at a panel discussion hosted by the International Monetary Fund (IMF).・Fed Chair Powell said the Fed needed to act quickly rather than deal with high inflation, suggesting that interest rates would remain strong. A rate hike is likely in the coming months. Powell’s comments helped drive Wall Street stocks lower. The S&P 500 fell 1.5% to close at 4,393.66 after initially gaining 1.2%.
Japan’s Finance Minister Shunichi Suzuki expressed somewhat strong opposition to “sudden movements” in the exchange rate after meeting with Finance Secretary Janet Yellen on the sidelines of the G20 Finance Ministers’ Meeting. The US dollar rose to 128.57 yen from 128.36 yen early on Friday. The euro rose to $1.0842 from $1.0840. Intervention, especially from the United States, could come, says SPI Asset Management’s Stephen Innes.
The Dow Jones Industrial Average dropped 1% to 34,792.76 and the Nasdaq dropped 2.1% to 13,174.65. Small company stocks have fallen more than the market as a whole. The Russell 2000 was down 2.3% to 1,991.46. “Unfortunately, under the weight of war, global energy and food risks, the stock market could start to collapse in a very spectacular way. ACY Securities chief economist Clifford Bennett has long said the only way to protect investment portfolios is to be cautious about buying stocks, gold, oil and the US dollar.
Markets across the board were restless this week as investors weighed the latest corporate earnings amid lingering concerns about the Fed’s exit from ultra-low interest rates. The Fed has already announced he will raise rates by a quarter of a percentage point, and Wall Street expects him to raise rates by half a percentage point at its next meeting in two weeks. Other central banks are also raising interest rates to soften the impact of higher inflation on businesses and consumers.
- Asian equities fall following remarks on inflation from the Fed chief
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