South Korea, Japan down 2% after Powell’s speech
A pedestrian looks at the stock prices of Japanese companies on the Tokyo Stock Exchange displayed on an electronic board in Tokyo on April 30, 2021.
Yuki Iwamura | AFP | Getty Images
Shares in the Asia-Pacific traded lower on Monday after Fed Chairman Jerome Powell̵[ads1]7;s speech in Jackson Hole on Friday. He warned that rising interest rates will cause “some pain” for the US economy, and said higher rates are likely to persist “for some time.”
The Nikkei 225 in Japan fell 2.57% and the Topix index fell 2.09%. South Korea’s Kospi fell 2.4% and the Kosdaq index fell 3.14%.
In Australia, the S&P/ASX 200 fell 2%.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.9%, while the Japanese yen traded at 138.27 per dollar.
On Friday in the US, the Dow Jones Industrial Average plunged 1,008 points, or 3.03%, to 32,283.40. The S&P 500 fell 3.37% to 4,057.66 and the Nasdaq Composite fell 3.94% to 12,141.71.
“While higher interest rates, slower growth and softer labor market conditions will bring inflation down, they will also bring some pain to households and businesses,” Powell said. “These are the unfortunate costs of reducing inflation. But a failure to restore price stability will mean far greater pain.”
He said the Fed’s decision in September “will depend on the totality of the incoming data and the evolving outlook.”
