HONG KONG — Asian shares were mixed on Tuesday amid a busy week, with several top reports on US inflation coupled with a Federal Reserve policy meeting.
US futures and oil prices fell.
In Tokyo, the Nikkei 225 index rose 0.1% to 39,092.32 as investors awaited the outcome of a Bank of Japan meeting. The central bank raised its benchmark interest rate in March to a range of 0 to 0.1%, from minus 0.1%, for the first time in 17 years.
Analysts said markets were leaning towards two rate hikes by the end of this year, with broad expectations of further rate hikes as early as July.
Hong Kong’s Hang Seng fell 1.1% to 18,165.21, and the Shanghai Composite lost 0.9% to 3,023.46 after reopening after a holiday. Markets remained cautious ahead of a report on inflation in China due on Wednesday.
The Australian S&The P/ASX 200 fell 1.4% to 7,748.30. South Korea’s Kospi was 0.3% higher at 2,709.87.
On Monday the S&The P500 rose 0.3% to 5,360.79, surpassing last week’s all-time high. The Nasdaq composite also set a record after rising 0.3% to 17,192.53, while the Dow Jones Industrial Average gained 0.2% to 38,868.04.
Data on the economy has been mixed lately, and traders are hoping for a slowdown that stops short of a recession and is just the right size. A cooldown would put less upward pressure on inflation, which could prompt the Federal Reserve to cut its key interest rate from the toughest level in more than two decades.
But the numbers are difficult to analyze as Friday’s stronger-than-expected jobs report quickly follows weaker-than-expected reports on U.S. manufacturing and other sectors of the economy. Even within U.S. consumer spending, the heart of the economy, there is a sharp divide lower-income households struggling to keep up with the still high inflation and higher income households are doing much better.
Companies benefiting from the AI boom continue to report big growth, almost regardless of what the economy and interest rates are doing.
Nvidiafor example, is worth about $3 trillion and rose 0.7% on Monday after paring an early morning loss. It was the first day of trading for the company since a 10-to-one stock split made the share price more affordable to investors after it soared to more than $1,000 during the AI frenzy.
Treasury yields were mixed in the bond market ahead of reports later this week that will show whether inflation has improved over the past month at both the consumer and wholesale levels.
The Federal Reserve will announce its latest interest rate decision on Wednesday. Hardly anyone expects that the main interest rate will change. But policymakers will release their latest predictions about where they see interest rates and the economy going in the future.
The last time Fed officials released such projections, in March, they indicated that the average member foresaw roughly three rate cuts in 2024. That projection will almost certainly fall this time. Wall Street traders are largely betting on just one or two rate cuts in 2024, data from CME Group shows.
On the bond market, the yield on ten-year government bonds rose from 4.43% at the end of Friday to 4.46%. The two-year interest rate, which is more in line with expectations for the Fed, fell from 4.89% to 4.88%.
In other trades, U.S. benchmark crude lost 3 cents to $77.71 a barrel in electronic trading on the New York Mercantile Exchange.
Brent crude, the international standard, fell 14 cents to $81.49 a barrel.
The US dollar rose from 157.04 yen to 157.25 Japanese yen. The euro rose from $1.0766 to $1.0770.