Asian Shares Retreat On Fed Rate Uncertainty

Asian stocks succumbed to selling pressure on Wednesday, as signs of a strong U.S. job market added to fears that high interest rates could weigh on global growth.

The dollar index held close to its highest since November 2022 and the U.S. 10-year Treasury yields notched a 16-year high, keeping gold prices under pressure in Asian trading.

Oil prices fell ahead of the OPEC+ meeting on Wednesday, with members expected to keep output policy unchanged.

Mainland Chinese markets remained closed for the Golden Week holiday. Hong Kong’s Hang Seng Index fell 0.8 percent to 17,195.84 on ongoing concerns over an investigation into China Evergrande Group’s founder and the heavily indebted property developer’s offshore debt restructuring plan. Evergrande shares plunged 12.2 percent.

Japanese shares slumped to over four-month lows as the yen abruptly bounced higher after falling below the 150 level versus the dollar on uncertainty about the U.S. economic outlook.

The Nikkei 225 Index tumbled 2.3 percent to 30,526.88, while the broader Topix Index settled 2.5 percent lower at 2,218.89.

Banks and tech stocks paced the decliners, with Tokyo Electron, Advantest, Sumitomo Mitsui Financial and Mitsubishi UFJ Financial plummeting 3-5 percent.

Seoul stocks led regional losses, with the Kospi plunging 2.4 percent to 2,405.69, marking the lowest level since March. LG Energy Solution, POSCO Holdings and Samsung SDI lost 4-5 percent.

Australian markets hit 11-month lows, dragged down by banks and energy stocks. The downside remained capped somewhat after a survey showed Australia’s services sector returned to expansion in September.

The benchmark S&P ASX 200 Index slid 0.8 percent to 6,890.20, while the broader All Ordinaries Index closed 0.8 percent lower at 7,082.20.

Across the Tasman, New Zealand’s benchmark S&P NZX-50 Index finished marginally lower at 11,235.05.

Earlier today, the Reserve Bank of New Zealand maintained the official cash rate at a 15-year high of 5.5 percent and said policy needs to remain restrictive to bring inflation to heel.

U.S. stocks fell sharply overnight to reach four-month lows, as the August job openings survey signaled a tight labor market, keeping the risks tiled toward another Fed rate hike.

The Dow dropped 1.3 percent and the S&P 500 lost 1.4 percent, while the tech-heavy Nasdaq Composite plunged 1.9 percent to extend the late summer sell-off.

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