Asian Shares Retreat On Hawkish Fed

Asian stocks slumped on Friday, pressured by strength in U.S. Treasury yields amid hawkish Federal Reserve bets.

The dollar stood tall after Fed Chairman Jerome Powell toughened his stance on inflation, saying, “There’s something in the idea of front-loading” rate hikes.

Money markets now fully price in a half-point Fed move in May and two 75 basis point hikes at the June and July FOMC meetings.

Chinese shares ended slightly higher as authorities vowed to provide more support to hard-hit firms amid crippling COVID outbreaks.

The China Securities Regulatory Commission said in a statement that it urged institutional investors, including the National Social Security Fund, banks, and insurers, to invest more in equities.

The benchmark Shanghai Composite Index edged up 0.2 percent to 3,086.92, while Hong Kong’s Hang Seng Index settled 0.2 percent lower at 20,638.52.

Japan’s Nikkei 225 Index tumbled 1.6 percent to 27,105.26, retreating for the first time in four sessions following Wall Street’s overnight weakness. Tokyo Electron, Fast Retailing and SoftBank Group lost 2-3 percent, while Toshiba jumped 4.7 percent after saying it would solicit deal offers.

Japan’s key consumer prices advanced at the fastest pace in more than two years in March, while manufacturing activity grew at a slower rate in April, separate reports showed.

Australian markets lost ground to snap a five-day winning streak. The benchmark S&P/ASX 200 Index slumped 1.6 percent to 7,473.30, with miners underperforming on concerns over demand weakness from top steel producer China. Tech stocks and gold miners also saw broad-based declines.

South Korea’s Kospi ended down 0.9 percent at 2,704.71, with tech heavyweights Samsung Electronics and SK Hynix losing 1-2 percent.

New Zealand’s NZX-50 Index dropped 0.4 percent to 11,908.40 on interest rate concerns. Air New Zealand shares surged 4.7 percent, while the rights soared 15.3 percent.

U.S. stocks pulled back sharply overnight, the dollar gained and Treasury yields rose across the curve after Fed Chair Jerome Powell said he saw merit in “front-end loading” policy moves, including a 50 basis point rate hike at the May meeting.

The tech-heavy Nasdaq Composite tumbled 2.1 percent to reach its lowest closing level in over a month, while the Dow gave up 1.1 percent and the S&P 500 shed 1.5 percent.

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