By YURI KAGEYAMA, AP Business Writer
TOKYO (AP) — Asian stocks were mostly down Friday in subdued trading as investors watched inflation.
Benchmarks fell in Tokyo, Seoul, Sydney and Hong Kong, but rose in Shanghai and Mumbai.
Japan’s core consumer prices rose 3.0% in September from a year earlier, according to government data released on Friday. That was the highest increase in eight years. It would also have been the highest in more than 30 years if the impact of introducing and raising the consumption tax were excluded.
The Bank of Japan has maintained an ultra-low interest rate policy, while the Federal Reserve and other central banks have been raising rates to offset rising prices. Until recently, the Japanese central bank had devoted its efforts to avoiding deflation, or the continued downward spiral of prices.
In currency trading, the US dollar rose to 150.25 Japanese yen from 150.09 yen, increasing pressure on the BOJ to modify its monetary policy as a weaker yen amplified price gains due to higher import costs. The euro was little changed at 97.81 cents, inching down from 97.87 cents.
Japan’s benchmark Nikkei 225 index fell 0.2% in morning trading to 26,951.59. Australia’s S&P/ASX 200 lost 0.5% to 6,698.60. South Korea’s Kospi fell 0.1% to 2,215.53. Hong Kong’s Hang Seng fell 0.1% to 16,256.95, while the Shanghai Composite gained 0.5% to 3,048.97. Shares opened 0.3% higher in Mumbai.
“The general mood remains cautious, with earnings on Wall Street shrinking and yields trending higher on a more aggressive political outlook,” Yeap Jun Rong, market strategist at IG in Singapore, said in a report. .
Treasury yields have risen to multi-year highs, a trend that has helped boost rates on mortgages and other loans. The 10-year Treasury yield rose to 4.23% from 4.14% on Wednesday and is at its highest level in 14 years. The two-year Treasury yield, which tends to track expectations of future Federal Reserve actions, rose to 4.61% from 4.56%.
Investors around the world remain concerned about inflation and the possibility of recessions around the world. Higher interest rates tend to discourage lending and investment, which slows economic activity and could push economies into recession.
Stocks on Wall Street lost ground on Thursday, although the main indexes held up to a weekly gain after a strong two-day rally earlier this week.
The S&P 500 fell 0.8% to 3,665.78 and the Dow Jones Industrial Average fell 0.3% to 30,333.59. The Nasdaq Composite fell 0.6% to 10,614.84. Small-company shares fell more than the broader market, sending the Russell 2000 Index down 1.2% to 1,704.39.
Corporate earnings remained a big focus for Wall Street throughout the week as investors try to get a better picture of how companies are doing amid the highest inflation in four decades and how they see the economy moving forward. .
Results have been mixed so far.
“Earnings growth estimates for the current quarter are 3.6% higher than a year ago,” said Bill Northey, senior chief investment officer at US Bank Wealth Management. “Just a few months ago, expectations were for 10% gains. growth in the third quarter, so there has been a significant downgrade in the level of expected earnings growth this year.”
IBM rose 4.7% after its third-quarter earnings and revenue beat analysts’ forecasts. AT&T jumped 7.7% after also reporting strong results.
Tesla fell 6.6% after saying it will miss its target for vehicle deliveries this year. Union Pacific fell 6.8% after the rail operator forecast slower growth, suggesting the economy may be slowing. Its rival CSX fell 3%. American Airlines fell 3.8% after reporting its latest results.
Allstate fell 12.9% after giving investors a disappointing financial update.
Markets in Europe closed higher after British Prime Minister Liz Truss resigned following turmoil in financial markets caused by multiple policy reversals.
The US labor market remains strong, with the latest government data showing the number of Americans filing for unemployment benefits fell last week and remains at a historically low level.
The healthy labor market is a sticking point as it suggests the Fed will have to persist in raising interest rates. The central bank raised its key interest rate to a range of 3% to 3.25%. Just over six months ago, it was almost zero.
The increases are putting pressure on other areas of the economy, including the housing market, where mortgage rates are now at 15-year highs. Mortgage buyer Freddie Mac reported Thursday that the key 30-year average rate rose this week to 6.94% from 6.92% last week. Last year at this time, the rate was 3.09%.
That is helping to stall a housing sector that has been burning for years. The National Association of Realtors said Thursday that sales of previously occupied US homes fell in September for the eighth straight month.
In energy trading, benchmark US crude gained 31 cents to $84.83 a barrel in electronic trading on the New York Mercantile Exchange. It was down 1 cent on Thursday at $84.51 a barrel. Brent crude, the international standard, rose 30 cents to $92.68 a barrel.
AP business writers Damian J. Troise and Alex Veiga contributed to this report.
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