BANGKOK – Asian shares were mostly lower Friday in muted trading, as investors kept an eye on inflation.
Benchmarks fell in Tokyo, Seoul, Sydney and Hong Kong but rose in Shanghai and Mumbai.
Japan's core consumer prices rose 3.0% in September from a year earlier, according to government data released Friday. That was the highest increase in eight years. It would also have been the highest in more than 30 years if the impact of introducing and raising the consumption tax was excluded.
The Bank of Japan has kept an ultra-low interest rate policy, while the Federal Reserve and other central banks have been raising rates to counter surging prices. Until recently, the Japanese central bank had devoted its efforts to fending off deflation, or the continued downward spiraling of prices.
In currency trading, the U.S. dollar rose to 150.25 Japanese yen from 150.09 yen, adding to pressure on the BOJ to tweak its monetary policy since a weaker yen amplified rising prices due to the higher costs for imports. The euro was little changed at 97.81 cents, inching down from 97.87 cents.
Japan's benchmark Nikkei 225 declined 0.2% in morning trading to 26,951.59. Australia's S&P/ASX 200 shed 0.5% to 6,698.60. South Korea's Kospi edged down 0.1% to 2,215.53. Hong Kong's Hang Seng fell 0.1% to 16,256.95, while the Shanghai Composite gained 0.5% to 3,048.97. Shares opened 0.3% higher in Mumbai.
“The overall mood remains cautious, with the paring of gains in Wall Street and yields trending higher on a more hawkish policy outlook,” Yeap Jun Rong, a market strategist at IG in Singapore, said in a report.
Treasury yields have risen to multiyear highs, a trend that’s helped push rates higher on mortgages and other loans. The yield on the 10-year Treasury climbed to 4.23% from 4.14% late Wednesday and is at its highest level in 14 years. The yield on the two-year Treasury, which tends to track expectations for future Federal Reserve action, rose to 4.61% from 4.56%.
Investors around the world remain concerned about inflation and the potential for recessions throughout world. Higher interest rates tend to discourage borrowing and investments, slowing economic activity and could tip economies into recession.
Stocks on Wall Street lost ground on Thursday although the major indexes remained on pace for a weekly gain after a strong two-day rally earlier this week.
The S&P 500 fell 0.8% to 3,665.78 and the Dow Jones Industrial Average slipped 0.3% to 30,333.59. The Nasdaq composite fell 0.6% to 10,614.84. Small company stocks fell more than the broader market, pulling the Russell 2000 index 1.2% lower, to 1,704.39.
Corporate earnings remained a big focus for Wall Street all week as investors try to get a better picture of how companies are faring amid the hottest inflation in four decades and how they see the economy moving forward.
The results have been mixed so far.
“Earnings growth estimates for the current quarter are coming in 3.6% higher than they were a year ago," said Bill Northey, senior investment director at U.S. Bank Wealth Management. “Just a matter of months ago, the expectations were for 10% earnings growth in the third quarter. So there has been a material downgrade to the level of expected earnings growth this year.”
IBM rose 4.7% after its third-quarter earnings and revenue topped analysts' forecasts. AT&T jumped 7.7% after also reporting strong results.
Tesla fell 6.6% after saying it will miss its target for vehicle deliveries this year. Union Pacific dropped 6.8% after the railroad operator predicted slower growth, suggesting that the economy may be slowing down. Rival CSX fell 3%. American Airlines fell 3.8% after reporting its latest results.
Allstate slumped 12.9% after giving investors a disappointing financial update.
Markets in Europe closed higher after British Prime Minister Liz Truss resigned following financial market turmoil caused by multiple policy U-turns.
The U.S. employment market remains strong, with the latest government data showing the number of Americans applying for unemployment benefits fell last week and remains historically low.
The healthy jobs market is a sticking point since it suggests the Fed will have to persist in raising interest rates. The central bank has raised its key interest rate to a range of 3% to 3.25%. Just over six months ago, it was near zero.
The increases are putting pressure on other areas of the economy, including the housing market, where mortgage rates are now at 15-year highs. Mortgage buyer Freddie Mac reported Thursday that the average on the key 30-year rate ticked up this week to 6.94% from 6.92% last week. Last year at this time, the rate was 3.09%.
That's helping to stall a housing sector that has burned hot for years. The National Association of Realtors said Thursday that sales of previously occupied U.S. homes fell in September for the eighth straight month.
In energy trading, benchmark U.S. crude gained 31 cents to $84.83 a barrel in electronic trading on the New York Mercantile Exchange. It lost 1 cent on Thursday to $84.51 a barrel. Brent crude, the international standard, added 30 cents to $92.68 a barrel.
AP Business Writers Damian J. Troise and Alex Veiga contributed to this report.