© Reuters. FILE PHOTO: A man with an umbrella looks at an electronic stock price sign outside a Tokyo brokerage April 7, 2015. REUTERS/Issei Kato
By Andrew Galbraith
SHANGHAI (Reuters) – Asian stocks cut losses on Friday after a volatile session for US equities, as the dollar hovered around its 20-year high as investors continued to worry about continued high inflation and tightening policies from the US dollar. central bank.
Those concerns eventually overcame Wall Street hopes that high inflation could peak, confirming nearly 20% of its all-time high in January on Thursday.
In an interview later in the day, US Federal Reserve Chairman Jerome Powell said the battle to control inflation “would involve some pain.” And he reiterated his expectation of a half percentage point rate hike at each of the Fed’s next two policy meetings, pledging that “we are willing to do more.”
But after heavy losses the day before, Asian stocks jumped higher on Friday morning.
MSCI’s broadest index of Asia-Pacific stocks outside of Japan rose 1.5% from Thursday’s 22-month low, cutting losses for the week to about 3%.
Australian equities rose 1.53%, while the stock index rose 2.61%.
In China, the blue-chip CSI300 index rose 0.41% and Hong Kong’s index rose 2.21%.
“We had some pretty big moves yesterday, and when you see those big moves it’s only natural to get some retracement, especially since it’s Friday heading into the weekend. There’s not really any new story coming through,” said Matt Simpson, senior marketer analyst at City Index.
“I think there comes a point where you run out of sellers. I’m not really sure this is going to be a buy rally at this point, possibly a short run rally before the weekend.”
Higher stock prices were reflected in falling US Treasuries, with the benchmark for the US 10-year yield rising to 2.8895% from a closing price of 2.817% on Thursday.
The policy-sensitive 2-year yield was 2.5941%, against a closing price of 2.522%.
“Within the shape of the US Treasury curve, we don’t see a particularly new recession/slowdown signal, but the same consistent clear slowdown envisioned for H2 2023,” Alan Ruskin, macro strategist at German Bank (ETR:), said in a note.
The US dollar remained near its 20-year high, bolstered by safe-haven demand as Russia rages over Finland’s plan to apply for NATO membership, with Sweden possibly following.
Moscow called Finland’s announcement hostile and threatened retaliation, including unspecified “military-technical” measures.
The , which it tracks against a basket of currencies from other major trading partners, fell about 0.1% to 104.64. But the greenback was stronger against the yen, which traded at $128.95 per dollar after a two-week high of 127.5 that hit overnight.
The European unit currency was 0.15% firmer at $1.0395 after trading lower earlier in the day.
Cryptocurrency bitcoin also moved higher, breaking through $30,000 after the collapse of TerraUSD, a so-called stablecoin, pushed it to a 16-month low of about $25,400 on Thursday.
In commodities markets, oil prices were higher amid an imminent ban on Russian oil by the European Union, but they were still at their first weekly loss in three weeks, hit by inflation concerns and China’s COVID lockdowns that could affect the global economy. slow growth.
rose 1.28% to $107.49 a barrel, and the global benchmark rose 1.5% to $109.06 a barrel.
which had been driven to a three-month low by the rising dollar, rose 0.23% to $1,825.86 an ounce.