By YURI KAGEYAMA, AP Business Writer
TOKYO (AP) – Parts of Asia traded mixed on Monday, as investors watched rising energy costs and prospects for rising U.S. interest rates.
Benchmarks rose in Japan and Australia, while falling in South Korea and China.
Some analysts worry that if the U.S. Federal Reserve raises interest rates too quickly, or too much, it could set in motion a recession. The U.S. slowdown will almost certainly hurt the Asian region, which exports and manufacturers for the U.S. economy.
The Fed says it will continue to raise interest rates to curb rising inflation. The benchmark short -term interest rate is at a record low of almost zero during most coronavirus pandemics.
“Many others see the risk of a recession in 2024, but we have been aggressive from the beginning of our forecast for a potential US recession this year,” said Clifford Bennett, chief economist at ACY Securities .
Japan’s benchmark Nikkei 225 gained 0.2% in morning trading to 26,492.29. SoftBank Group’s stock rose despite reporting multiple losses on its investments last week. Retail chain Uniqlo has also risen after falling in recent weeks due to concerns about a lockout in China.
In other regional trades, Australia’s S & P/ASX 200 rose 0.2% to 7,092.30. South Korea’s Kospi fell 0.1% to 2,601.41. Hong Kong’s Hang Seng lost 0.2% to 19,851.63. while the Shanghai Composite declined 0.3% to 3,074.79.
Even if concerns over rising interest rates have been somewhat allayed, investors are still watching closely what Fed Chariman Jerome Powell has to say next, according to Stephen Innes, managing partner of SPI Asset Management.
“That doesn’t mean the bear market is over, especially with everyone’s mind shrinking,” Innes said.
Wall Street ended last week with a broad rally, but the market still recorded its sixth consecutive week of declines, the longest in a row in 2011.
The S&P 500 rose 2.4% to 4,023.89. The index is now down 15.6% for the year. The Dow gained 1.5% to 32,196.66, while the Nasdaq rose 3.8% to 11,805. The company’s small stocks also held a solid rally. Russell 2000 gained 3.1% to 1,792.67.
Even as some aspects of the technology improved, Twitter fell 9.7% on Friday, after Tesla CEO Elon Musk said he had put up his deal to acquire the social media company. Tesla rose 5.7%.
The upcoming corporate earnings phase may provide insights into how inflation has affected businesses and consumers. Several major U.S. retailers reported results later this week, including Walmart, Target and Home Depot.
Markets have collapsed since late March as traders worried that the Fed may not succeed in its dangerous mission of slowing the economy to curb the highest inflation in four decades without causing a recession.
In the energy trade, benchmark U.S. crude lost $ 1.61 to $ 108.89 per barrel in electronic trading on the New York Mercantile Exchange. It jumped from $ 4.36 to $ 110.49 on Friday. Brent crude, the international standard, fell $ 1.68 to $ 109.87 per barrel.
In currency trading, the US dollar fell to 128.89 Japanese yen from 129.28 yen. The euro is worth $ 1.0397, up from $ 1.0402.
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