BANGKOK (AP) — Asian shares declined on Friday after U.S. markets were closed to observe a National Day of Mourning for former President Jimmy Carter.
U.S. futures were lower, and oil prices rose. Regional markets experienced a broad decline, attributed to weakening confidence regarding potential further interest rate cuts by the Federal Reserve, following recent data that indicated unexpected strength in the U.S. economy.
Minutes from a Dec. 17-18 meeting, released earlier this week, revealed that Federal Reserve officials anticipated reducing the pace of interest rate cuts this year due to persistently elevated inflation and the risk of tariff increases under President-elect Donald Trump and other possible policy changes.
Economists at the Federal Reserve considered the U.S. economy’s future path particularly uncertain at the December meeting, partly due to the potential changes to trade, immigration, fiscal, and regulatory policies expected with the incoming Trump administration.
Investors were focused on a U.S. non-farm jobs report due from the Labor Department later in the day. Concerns lingered that the Federal Reserve may maintain a more restrictive policy stance than previously expected, potentially impacting market sentiment.
Uncertainty over the extent to which higher tariffs could be imposed on China and other countries under the new administration added to investor caution, just days before Trump’s Jan. 20 inauguration. Increased tariffs on Chinese goods are anticipated, but the scope of potential tariff measures on other economies in the region remains unclear.
In Tokyo, the Nikkei 225 index fell by 1.1% to 39,190.40, while South Korea’s Kospi dropped 0.2% to 2,515.78. Chinese markets extended their losses, with the Hang Seng in Hong Kong declining 0.9% to 19,062.38, and the Shanghai Composite index down by 1.3% to 3,168.52.
Australia’s S&P/ASX 200 fell by 0.4% to 8,294.10. In other markets, Bangkok’s SET slipped by 0.1%, while India’s Sensex rose 0.1%. Taiwan’s Taiex was 0.3% lower.
In the United States, the bond market remained open on Thursday until its recommended closure at 2 p.m. Eastern time. Yields remained relatively steady after a strong recent rise that had affected the stock market.
The yield on the 10-year Treasury stood at 4.69%, after exceeding 4.70% the previous day, nearing its highest level since April. It was below 3.65% in September. Rising yields have made borrowing more expensive for companies and households and shifted some investors’ focus from stocks to bonds. Reports indicating a stronger-than-expected U.S. economy have driven yields higher, with additional concerns about upward inflationary pressures from potential tariff and tax policies.
In European trading on Thursday, London’s FTSE 100 rose 0.8% to 8,319.69, as the value of the British pound declined against the U.S. dollar amid concerns about the U.K.’s economy and government finances. A weaker pound often benefits U.K. exporters, supporting their stock prices.
Germany’s DAX dropped 0.1% to 20,317.10, while France’s CAC 40 gained 0.5% to 7,490.28.
In early trading on Friday, U.S. benchmark crude oil rose by 67 cents to $74.59 per barrel, while Brent crude, the international standard, increased by 68 cents to $77.60 per barrel.
The U.S. dollar strengthened to 158.40 Japanese yen from 158.14 yen, while the euro slipped to $1.0292 from $1.0301.
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