Asian Shares Mixed On Rate Hike Worries

Asian stocks ended mixed on Friday amid ongoing uncertainty about where inflation and interest rates are headed.

The dollar ticked higher after a spike in short-term U.S. Treasury yields as Richmond Fed President Thomas Barkin said it’s important for the U.S. central bank to continue to raise rates to ensure it brings inflation back to the 2 percent target.

Gold was marginally lower in Asian trading, while oil extended losses on signs of rising inventories in the U.S.

Mainland China and Hong Kong stocks fell after China’s inflation data came in lower than expected, suggesting weak demand.

Chinese consumer price inflation rose to 2.1 percent in January from 1.8 percent in December, the National Bureau of Statistics reported. This was slightly below economists’ forecast of 2.2 percent.

Producer prices declined at a faster pace of 0.8 percent after easing 0.7 percent in December. Economists had forecast prices to drop 0.5 percent.

China’s Shanghai Composite Index slipped 0.3 percent to 3,260.67, while Hong Kong’s Hang Seng Index plunged 2.0 percent to 21,190.42, dragged down by tech stocks.

Japanese shares eked out modest gains as a slew of strong earnings reports offset investor anxiety ahead of BoJ Governor nominations.

The Nikkei 225 Index rose 0.3 percent to 27,670.98, while the broader Topix finished marginally higher at 1,986.96.

Chip-making equipment maker Tokyo Electron jumped 4.4 percent after raising its earnings outlook for the year. Advantest added 1.5 percent and Screen Holdings climbed 2.7 percent.

Kobe Steel soared 15 percent after raising its full-year profit forecast and announcing a record-high full-year dividend.

Seoul stocks ended lower amid the prospect of further rate hikes by the Federal Reserve to tame inflation. The Kospi shed 0.5 percent to close at 2,469.73.

SK Hynix and Korean Air both fell around 1 percent. Hybe dropped 1.5 percent after it agreed to acquire a 14.8 percent stake in rival K-pop agency SM Entertainment to become its largest shareholder.

Australian markets fell notably as the Reserve Bank of Australia boosted its forecast for core inflation and wage growth this year and predicted further increases in interest rates.

The benchmark S&P/ASX 200 Index closed 0.8 percent lower at 7,433.70, dragged down by mining and energy stocks. The broader All Ordinaries Index ended down 0.8 percent at 7,631.10.

Power producer AGL Energy gave up 2.4 percent after posting its second-biggest six-month net loss and lowering its annual profit outlook.

Across the Tasman, New Zealand’s benchmark S&P/NZX 50 Index rose half a percent to 12,178.76 after the release of encouraging manufacturing and card spending data.

U.S. stocks declined overnight as hawkish comments by some Federal Reserve officials and an inversion of the U.S. Treasury bond yield curve stoked recession fears.

The Dow shed 0.7 percent, the tech-heavy Nasdaq Composite lost 1 percent and the S&P 500 gave up 0.9 percent amid increased bets for the Fed to hike its policy rate to 6 percent by September.

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