Economy

Asian shares decline after Fed hints rate hikes may end soon

  • 31. Mar 2023. 9:36
  • By The EU Times
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Asian stocks fell on Tuesday after the U.S. Federal Reserve hinted that its current rate hike cycle may be nearing an end.

The losses came after Wall Street had rallied on Monday, with the Dow Jones Industrial Average rising 1.2 percent, its biggest one-day gain since early June.

In Asia, the Shanghai Composite Index fell 0.7 percent to 4,099.45 and Tokyo's Nikkei 225 lost 0.3 percent to 22,868.51. Hong Kong's Hang Seng dropped 0.3 percent to 27,914.87 and Sydney's S&P-ASX 200 edged 0.1 percent lower to 6,719.50.

The losses followed a speech from Federal Reserve Chairman Jerome Powell, who said that the central bank's current policy of gradual rate hikes is “appropriate” but added that “we also recognize that the economic outlook is highly uncertain.”

Powell's comments suggested that the Fed's current cycle of rate hikes may be nearing an end, a sentiment echoed by other Fed officials who have said that the bank's rate hikes could soon be on hold.

Investors took the comments as a sign that the Fed may take a pause in its rate hikes, which could help to boost the global economy.

In currency markets, the dollar rose to 111.77 yen from 111.62 yen late Monday in Asia. The euro weakened to $1.1459 from $1.1460.