Source: AFP
Asian markets were mostly lower on Friday after data pointing to a still strong U.S. economy fueled fresh inflation concerns and dampened optimism that the Federal Reserve will cut interest rates as much as expected this year.
Stocks around the world rose on Thursday in response to the central bank’s forecast that it would cut borrowing costs three times this year, even as data showed rates rose in January and February.
News that the central banks of Switzerland and Mexico had begun to cut has added to the sense that policymakers are preparing to reverse their tightening measures.
All three major U.S. indexes hit record highs for a second straight day after a tech rally as traders contemplated the end of the two-decade era of high interest rates.
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But Asia struggled to maintain momentum after a series of data reminded investors that the world’s number one economy is still in rude health, resilient in the tightening credit environment.
Sales of existing homes in the United States rose by the most in a year last month, industry data showed, as buyers got used to rising borrowing costs, while initial claims for jobless benefits remained near historic lows, reinforcing the view that the labor market was still tight.
Meanwhile, the purchasing managers’ index of manufacturing activity rose faster than expected.
“This could potentially lead the Fed to implement rate cuts more slowly than the market anticipates,” warned Stephen Innes of SPI Asset Management.
Rodrigo Catril at National Australia Bank said “the composite measure of prices derived from manufacturers and service providers rose to a near one-year high on continued wage growth and higher fuel costs, suggesting persistent inflation.”
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![](https://images.yen.com.gh/images/befafb89c6d03580.jpg?impolicy=cropped-image&imwidth=256)
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Asian shares hit Wall St record high after Fed keeps interest rate forecast
In early trade, most markets were in the red in Asia.
Hong Kong lost two percent and Shanghai gave back more than one percent, with Sydney, Singapore, Seoul, Taipei, Manila and Jakarta also down.
However, Tokyo and Wellington moved up.
The yen rose slightly after data showing a 2.8% jump in Japanese inflation sparked debate over whether the country’s central bank will follow this week’s rate hike — the first in 17 years — with further increases.
The currency was hit on Tuesday after a warning from Bank of Japan chief Kazuo Ueda that officials would take their time after moving away from their long-standing policy of negative interest rates.
Keys around 02:30 GMT
Tokyo – Nikkei 225: UP 0.1 percent at 40,844.53 (break)
Hong Kong – Hang Seng Index: DOWN 2.0 percent to 16,518.81
Shanghai Composite: DOWN 1.2 percent at 3,040.81
![](https://images.yen.com.gh/images/b46cb36bdcabbc93.jpg?impolicy=cropped-image&imwidth=256)
![](https://images.yen.com.gh/images/b46cb36bdcabbc93.jpg?impolicy=cropped-image&imwidth=256)
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Dollar/yen: DOWN at 151.58 yen from 151.65 yen on Thursday
EUR/USD: DOWN at $1.0848 from $1.0861
GBP/USD: DOWN to $1.2647 from $1.2653
Euro/pound: DOWN to 85.76 pence from 85.82 pence
West Texas Intermediate: DOWN 0.6% to $80.57 a barrel
North Sea Brent crude: DOWN 0.6% at $85.26 a barrel
New York – Dow: UP 0.7 percent at 39,781.37 (close)
London – FTSE 100: UP 1.9 per cent to 7,882.55 (close)
Source: AFP