Asia-Pacific stocks fell sharply on Friday, heading for a weekly loss, as investors worried about the potential for further tightening by the Federal Reserve and the impact on the economy.
Short-term US Treasury yields held near one-month highs, helping the dollar against major currencies.
The MSCI Asia Pacific Index fell 0.92% and was heading for a weekly loss of 1.37% after losing 1.17% the previous week.
Mainland Chinese blue chips lost 0.731%, while Hang Seng fell 1.76%.
China’s factory-gate prices fell more than economists expected in January, suggesting that the domestic demand factors that have driven consumer prices since the end of the zero-covid-19 policy are still not what strong enough to revive the production sectors.
Australia’s benchmark index fell 0.762%, while South Korea’s Kospi fell 0.73%.
Japan’s Nikkei bucked the trend with a 0.253% gain, supported by several strong earnings reports.
Treasury yields hovered around 4.48% in Tokyo after touching their highest level since January 6 at 4.513% overnight.
The 10-year yield fell to around 3.68% after rising 3.97% midweek, also the highest since Jan. 1.
What about the US markets?
US stock futures were down 0.122% after the S&P 500 fell 0.87% overnight. German DAX futures were down 0.92% on the reset, while UK FTSE futures were down 0.45%.
Earlier this week, investors cheered after the Fed chief backed away from a more hawkish stance following last week’s stronger-than-expected jobs report.
Markets took Powell’s dovish stance as a green light for action, but a day later there were hawkish remarks from the Fed.
Money markets are currently experiencing a spike in the current rate cycle of around 5.16% in July.
The US dollar index, including the euro and yen, rose slightly to 103.28, staying in the middle of its range this week.
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