Asian Shares Struggle as Investors Digest Central Banks’ Rate Hikes

Asian markets struggled on Friday, with major indexes falling about 1.0%, as investors digested a slew of central bank rate hikes.

As of 9.30 A.M. Bangkok time, the Nikkei 225 in Japan dropped 1.28%on reports that Japan’s core inflation rate had slowed to 3.2% year-on-year in May from 3.4% in April, but still above the BOJ’s 2% target. Economists polled by Reuters predicted a core inflation rate of 3.1% for May.

South Korea’s Kospi fell 0.76%, while Australia’s S&P/ASX 200 was 0.82%% lower.

Hong Kong’s Hang Seng index slid 1.51% on its open as it came back from a public holiday, dragged by health-care and tech stocks. Mainland Chinese markets are closed for a public holiday Friday.

The S&P 500 and the Nasdaq Composite both ended the night higher in the United States, with the former gaining 0.37% and the latter gaining 0.95%. The Dow Jones Industrial Average, meanwhile, had a little decline, bringing its current losing run to four days.

Rate hikes by central banks in England, Norway, and Switzerland added to the upward pressure on bond yields. Bond yields for the 10-year period in Australia and Japan both increased on Friday.

Secretary of the Treasury Janet Yellen said that she believes the likelihood of a US recession is decreasing, and that a slowdown in consumer spending may be the price to pay for successfully concluding the fight to limit inflation.