Japan’s Nikkei 225 index shed 1.2% to 38,646.11, the Hang Seng in Hong Kong dropped 1.5% to 18,589.89, South Korea’s Kospi dropped 1.2% to 2,688.60, the S&P/ASX 200 in Australia lost 1% to 7,734.30, while Taiwan’s Taiex slid 0.2% after touching a record high on Thursday
Asian shares pulled back on Friday after strong reports on the U.S. economy raised the probability of interest rates staying high.
Japan’s Nikkei 225 index shed 1.2% to 38,646.11 and the Hang Seng in Hong Kong dropped 1.5% to 18,589.89.
South Korea’s Kospi dropped 1.2% to 2,688.60, while in Australia, the S&P/ASX 200 lost 1% to 7,734.30.
Taiwan’s Taiex slid 0.2% after touching a record high on Thursday.
Elsewhere, most U.S. stocks plunged on Thursday, in the latest example of how good news for the economy can be bad for Wall Street, when strong economic reports fuelled concern that the Fed might keep interest rates elevated to ensure there is a lid on inflation. The weakness was widespread and overshadowed another blowout profit report from market heavyweight Nvidia.
The S&P 500 dropped 0.7% to 5,267.84 in its sharpest decline since April. The DJIA declined 1.5% to 39,065.26, and the Nasdaq composite slid 0.4% to 16,736.03.
Treasury yields heightened the pressure after the stronger-than-expected reports on the U.S. economy, which forced traders to rethink bets about when the Fed could offer relief to financial markets through lower interest rates.
One report suggested growth in U.S. business activity is running at its fastest rate in over two years. S&P Global said its preliminary data showed growth improved for businesses not only in the services sector but also in manufacturing.
A separate report showed the U.S. job market remains solid despite high interest rates. Fewer workers applied for unemployment benefits last week than economists expected, an indication that layoffs remain low.
The Federal Reserve is trying to pull off the difficult feat of slowing the economy enough through high rates to get inflation back to 2% but not so much that it forces a painful recession. It’s been holding its main interest rate at the highest in more than two decades to do so, and Wall Street is itching for some easing.
