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Asia shares retreat after lacklustre day on Wall Street


Nikkei 225 gained 2.1% to 34,476.86, Hang Seng slid 0.4% to 16,122.67, Shanghai Composite index shed 0.2% to 2,887.18, Kospi lost 0.7% to 2,542.53, S&P/ASX 200 slid 0.7% to 7,469.20

Asian shares pulled back Wednesday following a lacklustre session on Wall Street, though Tokyo broke ranks, adding more than 2% after the government said it would double its disaster reserves by around $7 billion.

U.S. futures dropped while oil prices increased.

Tokyo’s Nikkei 225 is trading near a 34-year high, gaining 2.1% to 34,476.86, helped by heavy buying of chipmakers and by speculation that the BoJ may not opt to change its ultra-lax monetary policy as soon as thought after wages dropped for a 20th consecutive month in November.

Chipmaker Kyocera Corp. climbed 5.7%.

Elsewhere in Asia, Hong Kong’s Hang Seng slid 0.4% to 16,122.67, and the Shanghai Composite index shed 0.2% to 2,887.18.

South Korea’s Kospi lost 0.7% to 2,542.53, after the country’s unemployment rate stood at the highest since January 2022, as per Statistics Korea.

The S&P/ASX 200 in Australia slid 0.7% to 7,469.20. Wednesday’s data showed Australian consumer price inflation, or CPI, declined to an almost two-year low of 4.3% in November, accompanied by a sharp slowdown in core inflation, raising expectations of policy easing measures.

On Tuesday, the S&P 500 slid 0.1% to 4,756.50, following its best day in around two months. The Dow Jones Industrial Average dropped 0.4% to 37,525.16, and the Nasdaq composite added 0.1% to 14,857.71.

The Federal Reserve has already hiked its main interest rate to the highest level since 2001, hoping to grind down the economy and investment prices to get inflation under control. With inflation down significantly from its peak, the Fed has hinted it may cut rates three times through 2024. That would give investment prices a boost and relax the pressure on the economy and financial system.

Treasury yields have already slipped on expectation of rate cuts, and they have been holding steady. Early Wednesday, the yield on the 10-year Treasury was at 4.02%, up from 4.01% late Monday.

On Thursday, the U.S. government will give its latest monthly update on inflation at the consumer level.

On Friday, big firms in the S&P 500 will begin reporting their results for the final three months of 2023. The broad expectation is for firms in the index to report modest growth in earnings per share from a year earlier.

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