Asian Shares Mixed On Fed Comments, Recession Worries

Asian stocks ended on a mixed note Tuesday, with hawkish remarks from two Federal Reserve officials and fears of a coming recession weighing on markets.

Investors also turned cautious ahead of key U.S. inflation data due this week.
Japanese shares bucked the weak trend as traders returned to their desks following a public holiday.

Treasury yields fell and the dollar consolidated recent losses while oil prices fell after three consecutive sessions of gains.

Chinese shares snapped a six-day winning streak as Henan, the country’s third-most populous province, struggled to keep COVID cases in check. The benchmark Shanghai Composite index slipped 0.21 percent to 3,169.51.

Hong Kong’s Hang Seng index dropped 0.27 percent to 21,331.46 on concerns the recent rally in the opening days of 2023 is overdone.

Japanese shares hit a two-week closing high as tech stocks surged, and data showed core consumer prices in Tokyo exceeded the central bank’s 2 percent target for a seventh straight month in December.

The Nikkei average climbed 0.78 percent to 26,17.56 ahead of a policy meeting by the Bank of Japan early next week. The broader Topix index settled 0.27 percent higher at 1,880.88.

Chip giants Advantest and Tokyo Electron rallied 2-3 percent while heavyweight SoftBank Group added 2.4 percent following reports that British Prime Minister Rishi Sunak has reopened discussions with the Japanese technology investor for listing chip designer Arm on the London Stock Exchange.

Eisai soared 4.8 percent after securing FDA approval for its Alzheimer’s drug lecanemab, developed in partnership with Biogen Inc.

Utilities Kansai Electric Power and Tokyo Electric Power Company Holdings declined 3-4 percent.

Seoul stocks rose for the fifth day running, though overall gains remained capped amid lingering worries about U.S. rate hikes. The Kospi average finished marginally higher at 2,351.31 after a choppy trade.

LG Energy Solution jumped more than 2 percent amid the news that the battery maker is “in talks” with Ford Motor Co. to build a battery cell plant in Turkey.

Australian markets snapped a four-session winning streak, with tech stocks and gold miners leading losses. The benchmark S&P/ASX 200 fell 0.28 percent to 7,131 while the broader All Ordinaries index closed 0.26 percent lower at 7,336.60.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 index edged up 0.16 percent to 11,665.26.

U.S. stocks gave up early gains to end mixed overnight. as presidents of the U.S central bank’s San Francisco and Atlanta branches said the Fed will have to keep raising rates to somewhere above 5 percent in order to slow down inflation.

The Dow slipped 0.3 percent and the S&P 500 finished marginally lower while the tech-heavy Nasdaq Composite rose 0.6 percent as Treasury yields fell across the board.

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