A Majority of Asia-Pacific Markets Decline as Investors Prepare for More Hikes to Come

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Asia-Pacific markets were mostly lower as investors braced for further hikes ahead. Recent comments from US Federal Reserve officials have indicated that inflation is still a concern, and further rate hikes may be necessary to curb prices.

On Wednesday, Minneapolis Fed President Neel Kashkari said, “The Fed will continue doing what we’re doing until we finish the jobs, and I’m committed to doing that.”

The U.S. 10-year Treasury yield briefly topped 4% overnight, reaching its highest level. This increase in borrowing costs has rattled markets worldwide and caused investors to take a defensive stance. In Japan, the Nikkei 225 ended marginally lower at 27,498.87, and the Topix closed 0.16% lower at 1,994.57 as traders reacted to the rise in US yields.

South Korea’s Kospi bucked the trend as it climbed 0.62% to finish at 2,427.85 despite falling domestic consumer confidence and lacklustre export data for April, released earlier in the day. However, Kosdaq lost 0.56% to close at 787.19 as investors sold off tech stocks due to weak demand and tight regulations in the future.

Tesla suppliers in Asia were closely watched as the company’s stock fell more than 5% in after-hours trade due to a lack of details about any new products or services revealed at its recent Investor Day.

U.S. stocks were largely down as the S&P 500 fell and the Nasdaq Composite dropped overnight. The Dow Jones Industrial Average finished the day just above the flat line. Following recent comments from US Federal Reserve officials, investors were cautious that further rate hikes might be necessary to curb inflation. This increase in borrowing costs has rattled markets worldwide and caused investors to take a defensive stance.

Analysts warn that such tit-for-tat tariffs could significantly impact global economic growth and trigger a downward spiral in investor sentiment across Asia Pacific markets if unresolved.

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