Stocks rise in Hong Kong and Seoul, but slip in Tokyo
TOKYO — Asian shares were mixed Tuesday amid cautious trading ahead of a policy meeting by the U.S. Federal Reserve.
Japan’s benchmark Nikkei 225 NIK, -0.43% lost 0.2% in morning trading. Australia’s S&P/ASX 200 XJO, -0.63% slipped 0.6% while South Korea’s Kospi 180721, +1.16% surged 1.4%. Hong Kong’s Hang Seng HSI, -0.22% jumped 1%, while the Shanghai Composite SHCOMP, -1.10% slid 0.4%. Stocks rose slightly in Singapore STI, +0.41% and Taiwan Y9999, -0.01%, but slipped in Indonesia JAKIDX, -0.91% and Malaysia FBMKLCI, +0.44%.
With inflation in the U.S. at its highest point in three decades, the U.S. Federal Reserve is set this week to begin winding down the extraordinary stimulus it has given the economy since the pandemic recession struck early last year, a process that could prove a risky balancing act.
Chair Jerome Powell has signaled the Fed will announce after its policy meeting Wednesday that it will start paring its $120 billion in monthly bond purchases as soon as this month. Those purchases are intended to keep long-term loan rates low to encourage borrowing and spending.
Investors were also watching for any action from the Reserve Bank of Australia.
“While the record highs in Wall Street overnight may lift sentiments for Asia markets, the upcoming central banks’ decisions may put some risk sentiments on hold,” said Yeap Jun Rong, a market strategist at IG.
U.S. stocks closed with modest gains on Wall Street, extending the major indexes’ recent record-setting run. The S&P 500 SPX, +0.18% rose 0.2% to 4,613.67 after spending much of the day wavering between small gains and losses. The Dow Jones Industrial Average DJIA, +0.26% added 0.3% to 35,913.64 and the Nasdaq COMP, +0.63% rose 0.6% to 15,595.92. The gains pushed the three indexes above the all-time highs they set on Friday.
The latest gains came as investors reviewed another batch of corporate quarterly report cards in what has so far been a better-than-expected earnings season, despite Wall Street’s concerns over the impact supply chain disruptions and higher inflation are having on companies.
Bond yields rose, helping shares of banks that rely on higher yields to charge higher interest on loans. The yield on the 10-year Treasury rose to 1.56% from 1.55% late Friday.
n energy trading, benchmark U.S. crude CLZ21, -0.45% added 19 cents to $84.24 a barrel in electronic trading on the New York Mercantile Exchange. It gained 48 cents to $84.05 on Monday. Brent crude BRNF22, -0.35%, the international standard, rose 26 cents to $84.97 a barrel.
In currency trading, the U.S. dollar USDJPY, -0.19% rose to 114.08 Japanese yen from 113.98 yen.