Shares were mostly lower in Asia ahead of the Federal Reserve’s decision on interest rates.
In Japan, rising inflation and falling wages have raised concerns about the central bank’s ability to move away from near-zero interest rates. The Bank of Japan is set to announce its policy decision on Friday. In March, it raised its benchmark rate from -0.1% to a range of 0% to 0.1%, marking the first increase in 17 years.
The government reported a 2.4% rise in producer prices in May, as the yen’s weakness against the US dollar increased the cost of fuel and manufacturing imports. Meanwhile, real wages fell in April for the 25th consecutive month. There are worries that the Bank of Japan may be constrained from raising interest rates further due to concerns that higher prices could dampen consumer spending and harm the overall economy.
Tokyo’s Nikkei 225 index declined by 0.6% to 38,899.44.
Chinese shares also dropped as the latest inflation data indicated continued weak demand. The Hang Seng index in Hong Kong fell 1.5% to 17,913.10, while the Shanghai Composite index dipped slightly, losing less than one point to 3,027.41.
Australia’s S&P/ASX 200 decreased by 0.6% to 7,710.90, and Bangkok’s SET edged down by 0.1%.
However, gains in technology shares boosted prices in South Korea and Taiwan. The Kospi in South Korea rose 0.5% to 2,718.86, and Taiwan’s Taiex jumped 1.2%.
Trading was subdued on Tuesday on Wall Street ahead of a key inflation report and the Federal Reserve’s policy decision.
The S&P 500 rose by 0.3%, closing at 5,375.32, largely driven by gains in tech stocks, despite more stocks declining than advancing within the index. The tech-heavy Nasdaq Composite increased by 0.9% to 17,343.55, with both indexes setting record highs for the second consecutive day. Apple led the way, surging 7.3% after emphasizing its advancements in artificial intelligence technology.
The Dow Jones Industrial Average, which tracks 30 leading US companies, slipped 0.3%, closing at 38,747.42.
The yield on benchmark 10-year US Treasury bonds fell to 4.40% from 4.47% late on Monday.
