Asian Shares Decline On Hawkish Fed Remarks

Asian stocks retreated on Friday as hotter-than-expected U.S. producer price data coupled with hawkish comments from two Federal Reserve officials stoked worries about further interest rate hikes.

Technology stocks led losses in the region as the benchmark 10-year U.S. Treasury yield climbed to a high of 3.900 percent, its highest level since December 30.

The dollar strengthened against Asian currencies, denting bullion’s appeal. Oil extended losses as concerns mounted about U.S. oversupply.

China’s Shanghai Composite Index dropped 0.8 percent to 3,224.02 despite the country’s top leaders declaring a “decisive victory” over COVID-19, claiming the world’s lowest fatality rate.

Hong Kong’s Hang Seng Index tumbled 1.3 percent to 20,719.81. China Renaissance shares plunged 28.3 percent after the investment bank said it has been unable to contact Mr. Bao Fan, the firm’s controlling shareholder, as well as chairman, executive director and CEO.

Japanese shares ended notably lower amid considerable uncertainties on the direction of monetary policy under new Bank of Japan Governor Kazuo Ueda.

The Nikkei 225 Index slid 0.7 percent to 27,513.13, while the broader Topix closed 0.5 percent lower at 1,991.93, dragged down by tech stocks.

Technology investor SoftBank Group lost 2.2 percent, while Advantest, Screen Holdings and Tokyo Electron ended down between 1.6 percent and 1.8 percent.

Staffing agency Recruit Holdings slumped 4 percent, while tire maker Bridgestone and steel firm Kobe Steel climbed 4-5 percent.

Seoul stocks declined on U.S. rate woes. The Kospi settled down 1.0 percent at 2,451.21, with Samsung Electronics, LG Energy Solution and Samsung SDI losing 2-4 percent.

Australian stocks closed lower after Reserve Bank of Australia governor Philip Lowe told members of parliament that the “full effect” of multiple interest rate hikes is yet to come and that rates still had a ways to rise.

The benchmark S&P/ASX 200 Index fell 0.9 percent to 7,346.80, led lower by coal miners and technology stocks. The broader All Ordinaries Index ended 0.9 percent lower at 7,552.20.

Whitehaven Coal shares plunged 5.2 percent, while tech majors Block Inc. and Xero Ltd. slumped 7.8 percent and 5.6 percent, respectively.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index slipped 0.1 percent to 12,144.66.

U.S. stocks fell sharply overnight, the dollar advanced and yields ticked up as initial jobless claims data showed a resilient labor market and a key metric showed wholesale prices increased more than expected in January.

The Dow lost 1.3 percent, the tech-heavy Nasdaq Composite shed 1.8 percent and the S&P 500 slumped 1.4 percent.

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