Asian markets are falling mainly before the US holidays

Asian markets are falling mainly before the US holidays

TOKYO (AP) – Asian markets were mostly lower in cautious trading on Monday ahead of US federal holidays.

Concerns about inflation and the risk of a global recession from the central bank’s efforts to bring it under control seemed to outweigh the positive closure of Wall Street on Friday.

The price of the most popular cryptocurrency in the world BTCUSD,
-3.20%
fell below the $ 20,000 psychological benchmark early Monday, rising to $ 20,742. Bitcoin sank nearly 10 percent to $ 18,600 over the weekend, according to cryptocurrency news site CoinDesk.

As of late afternoon in Tokyo, it was at $ 20,048.

Shares fell in most major Asian markets, but rose higher in China, which, in a widely anticipated move, kept key 1- and 5-year lending rates unchanged.

Given China’s struggle to control its cases and already faltering economy, “interest rate cuts in the coming months are still possible, as we expect the economic recovery to be slow under the COVID-zero policy. “After this rate hike, the government should provide more fiscal stimulus,” said Iris Pang, chief economist at ING Greater China.

The benchmark Japan Nikkei 225 NIK,
-0.74%
fell 0.7% to 25,771. S & P / ASX 200 XJO Australia,
-0.64%
slipped 0.6% to 6,433. SHCOMP,
-0.03%
Kospi of South Korea 180721,
-2.04%
fell 2.1% to 2,389.69. Hang Seng HSI of Hong Kong,
+ 0.31%
rose 0.1% to 21,111 points, while Shanghai Composite SHCOMP,
-0.03%
marked a small change, rising less than 0.1% to 3,317.69 points.

Two of the world’s three largest economies, China and Japan, are not raising interest rates.

Last week, the central bank of Japan adhered to its near-zero interest rate policy, although comments by Bank of Japan Governor Haruhiko Kuroda were closed and monitored for hints as to what Tokyo could do to weaken the yen.

A weaker currency could help the profits of Japanese export giants such as Toyota Motor Corp. TM,
-0.33%,
but it can also signal a fragile economy.

Kuroda voiced some concerns about the low yen and its impact on Japanese companies, but said he had no immediate plans to change monetary policy. This means an ever-widening gap between interest rates and return on investment in Japan and the US, and a continuing strength of the dollar.

“It’s inevitable that the US dollar should go up significantly higher, with the emperor in place, but as soon as the clothes appear to be missing, it will fall. “This could be one of the greatest train racing opportunities of all time,” said Clifford Bennett, chief economist at ACY Securities.

The US dollar was trading at 134.92 Japanese yen USDJPY,
-0.10%
on Monday, from 134.96 gen. The EURUSD,
+ 0.28%
costs $ 1.0526, from $ 1.0498.

US markets are closed on Monday for the June holiday. But the testimony on monetary policy by Federal Reserve Chairman Jerome Powell before the House Senate Committee and the House Financial Services Committee is scheduled for later this week.

Wall Street closed a difficult winding week, slightly higher. The S&P 500 SPX,
+ 0.22%
rose 0.2% to 3,674.84 points. Dow Jones Industrial Average DJIA,
-0.13%
fell 0.1% to 29,888.78 points, while the Nasdaq Composite COMP,
+ 1.43%
climbed 1.4% to 10,798.35.
The Russell 2000 RUT index,
+ 0.96%
of smaller shares rose 1% to 1,665.69.

Markets are preparing for a world with higher interest rates, led by the Federal Reserve. Higher interest rates may reduce inflation, but they also risk a recession by slowing the economy and pushing down prices for stocks, bonds, cryptocurrencies and other investments.

Last week, the Fed raised its key short-term interest rate three times higher than usual for the biggest increase since 1994. It could consider another such big increase at its next meeting in July. A report on the US economy last week also showed that industrial production was weaker than expected last month.

The yield of the 10-year Public TMUBMUSD10Y,
3.236%
fell to 3.23% on Friday from 3.30% late Thursday.

In energy trading, US benchmark crude oil CL.1,
+ 0.26%
rose 36 cents to $ 109.35 a barrel. crude Brent 00 BRN,
+ 0.36%,
the international standard rose 63 cents to $ 113.74 a barrel.

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