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Asia shares trade mixed as investors weigh latest U.S. data

Nikkei 225

Nikkei 225 lost 1.0% to 38,448.61, S&P/ASX 200 rose 0.3% to 7,759.20, Kospi climbed 1.2% to 2,695.02, Hang Seng advanced 1.2% to 18,659.24, while the Shanghai Composite slid nearly 0.1% to 3,088.18

Asian shares traded mixed Wednesday, as investors weighed recent data highlighting a slowing U.S. economy that offers both upsides and downsides for Wall Street.

Japan’s benchmark Nikkei 225 lost 1.0% in early trading to 38,448.61. Australia’s S&P/ASX 200 rose 0.3% to 7,759.20. South Korea’s Kospi climbed 1.2% to 2,695.02. Hong Kong’s Hang Seng advanced 1.2% to 18,659.24, while the Shanghai Composite slid nearly 0.1% to 3,088.18.

Analysts said data on wage growth in Japan will turn more pronounced once results of the recent spring labour negotiations kick in. That means the BoJ may be more likely to hike interests rates.

On Tuesday, the S&P 500 rose by 0.2% to 5,291.34, though more stocks within the index dropped than rose. The DJIA added 0.4% to 38,711.29, and the Nasdaq composite gained 0.2% to 16,857.05.

Action was stronger in the bond market, where Treasury yields dipped after a report showed U.S. employers were advertising fewer job openings at the end of April than economists expected.

Wall Street actually wants the job market and overall economy to slow enough to get inflation under control and convince the Fed to reduce interest rates. That would ease pressure on financial markets. Traders upped their expectations for cuts to rates later this year following the report, as per data from CME Group.

The risk is that the economy might overshoot and end up in a painful recession that would cause layoffs for workers across the country and weaken corporate profits, dragging stock prices down.

Tuesday’s report said the number of U.S. job openings at the end of April declined to the lowest level since 2021. The numbers indicate a return to “a normal job market” following years full of strange numbers caused by the pandemic, as per Bill Adams, chief economist for Comerica Bank.

But it also followed a report on Monday that showed U.S. manufacturing declined in May for the 18th time in 19 months.

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