© Reuters. Employees of foreign exchange trading company Gaitame.com work in front of monitors that show the exchange rate of the Japanese yen against the US dollar, the euro and the average Nikkei shares in its trading room in Tokyo, Japan, June 22, 2022. REUTERS / Issei Kato
By Sam Byford
TOKYO (Reuters) – Asian stocks fell in volatile trading on Wednesday, unable to prolong Wall Street’s rebound, as persistent interest rate and inflation concerns remained a key focus for investors, while the Japanese yen hit a new 24-year low against the dollar.
The broader Asia-Pacific equities index outside of Japan fell 1%, but was still up 1.39% from the more than five-week low reached on Monday. The one in Tokyo gave up early gains and stayed flat.
Investors continue to assess the extent to which they should be concerned about central banks pushing the global economy into recession as they try to reduce inflation in the red with rising interest rates.
The main benchmarks for US equities rose 2% overnight due to the possibility that the economic outlook may not be as disastrous as expected during trading last week, when it recorded its highest weekly percentage since of March 2020.
“I think this recent rebound in the bear market after the holidays is a reflection of the uncertainty that investors have as to whether or not we have seen the peak of inflation and the Hawkishness of the Fed or not; I think we are close. “said Invesco Global Market Strategist for Asia Pacific David Chao.
“While I suspect that global stock markets could end higher at the end of the year than we are today, it is conceivable to expect continued market volatility until it is clear that the Fed will not force the US economy to contraction in order to suppress persistent levels of inflation “.
In a signal that Wall Street could not repeat Tuesday’s rally, S&P 500 and Nasdaq futures fell above 0.5%.
Chinese chips lost 0.4%, Hong Kong chips lost 0.9% and Korean chips lost 1.78%.
U.S. Federal Reserve Chairman Jerome Powell will begin his testimony in Congress today with investors looking for more clues as to whether another 75-point rate hike is expected at the July Fed meeting.
Most other global central banks are in a similar situation, apart from the Bank of Japan, which last week pledged to keep its interest rate policy ultra low.
The gap between low interest rates in Japan and the rise in US interest rates has been heavy on the yen, which reached a new 24-year low of $ 136.71 on first-quarter quotes, before ‘go to the firmest drift to 136.18.
The minutes of the April Bank of Japan policy meeting released on Wednesday showed the central bank’s concern about the impact the currency crash could have on the country’s business environment.
Other currency movements were quieter on Wednesday, with the follow-up to the green dollar against six peers, a firmer touch at 104.6.
The yield on 10-year U.S. Treasury bonds remained fairly stable at 3.2674.
Oil prices have fallen, and U.S. President Joe Biden is expected to call for a temporary suspension of the 18.4-cent-per-gallon gasoline tax on Wednesday, a source told Reuters. the plan. [O/R]
it fell 2.1% to $ 112.27 a barrel, while it fell 2.21% to $ 108.09.
it fell 0.21% to $ 1,828.70 an ounce.
it continued to trade at around $ 20,640 after falling to $ 17,592 last week.