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Asian stocks follow Wall Street lower


Tokyo’s Nikkei 225 index shed 0.8% to 38,089.09 and S&P/ASX 200 slipped 1.2% to 7,574.20

Asian stocks dropped Wednesday with most of the markets in the region shut for a holiday. Meanwhile, U.S. stocks closed out their worst month since September.

Oil prices were lower and U.S. futures were mixed.

Tokyo’s Nikkei 225 index shed 0.8% to 38,089.09 in early trading after the country’s factory activity experienced a milder shrink in April, as the manufacturing PMI from au Jibun Bank rose to 49.6 in April from 48.2 in March. A PMI reading below 50 represents a contraction, and a reading of 50 indicates no change.

The yen continues to struggle. On Wednesday, the U.S. dollar rose to 157.89 Japanese yen from 157.74 yen.

Australia’s S&P/ASX 200 slipped 1.2% to 7,574.20. Other markets in the region were shut due to the Labor Day holiday.

On Tuesday, the S&P 500 dipped 1.6% to its first losing month in the last six, and closed at 5,035.69. Its momentum slammed into reverse in April — dropping 5.5% at one time — after setting a record at the end of March.

The DJIA declined 1.5% to 37,815.92, and the Nasdaq composite shed 2% to 15,657.82.

Stocks began dropping as soon as trading began, after a report showed U.S. workers won bigger gains in wages and benefits than expected during the first three months of the year. While that is good news for workers and the latest signal of a solid job market, it feeds into concerns that upward pressure remains on inflation.

It followed a string of reports this year that have shown inflation remains stubbornly high. That has caused traders to largely give up on hopes that the Fed will deliver multiple cuts to interest rates this year. And that in turn has sent Treasury yields climbing in the bond market, which has cranked up the pressure on stocks.

Tuesday’s losses for stocks accelerated at the end of the day as traders made their final moves before closing the books on April, and ahead of an announcement by the Fed on interest rates scheduled for Wednesday afternoon.

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