Daijiworld Media Network - Hong Kong
Hong Kong, Sep 24: Asian stocks fell Wednesday following losses on Wall Street, as Federal Reserve chair Jerome Powell offered little clarity on future interest rates and US economic data raised concerns over slowing growth.
MSCI's broadest index of Asia-Pacific shares outside Japan slid 0.4% in mid-morning trade, after the S&P 500 dropped 0.6% in the previous session, marking its biggest one-day loss in three weeks. Australian shares led regional declines, down 1% following a bigger-than-expected rise in consumer prices in August.
“Chair Powell in his speech emphasised that ‘near-term risks to inflation are tilted to the upside and risks to employment to the downside’, highlighting the challenges of balancing the Fed’s dual mandate in the current environment,” Westpac analysts said in a note, as reported by Reuters.
The greenback stabilised, with the dollar index up 0.1% at 97.301 and the dollar rising 0.1% to 147.735 against the yen, as traders interpreted signals from Fed officials.
Nikkei falls on slowing Japan manufacturing
Japan’s Nikkei index fell 0.5% after manufacturing activity slowed at the fastest pace in six months in September, driven by declines in new orders.
Despite the volatility, Asian stocks remain on track for their best monthly performance in a year, supported by a weaker dollar, a surge in regional technology stocks, and expectations of further Fed policy easing.
US Treasury yields
Traders increased bets on rate cuts, with Fed funds futures implying a 93% chance of a Fed reduction in October. US Treasury yields fell across the curve, with 10-year notes at 4.1061% and two-year yields at 3.5673%.
“The S&P PMIs were softer in the September preliminary release, but both remain in expansion and are within the range of the last few months,” Citi analysts noted. “The composite output prices index fell to the lowest level since April with anecdotes mentioning that firms are having difficulty passing on higher costs to consumers due to weak demand and more competition,” they added, as cited by Reuters.
Oil and gold update
Brent crude rose 0.4% to $67.87 per barrel after a deal to resume exports from Iraq's Kurdistan stalled. Gold slipped slightly, down 0.2% at $3,757.49 per ounce after hitting a record high on Tuesday.