TOKYO, Oct. 21 (BNA) Most Asian stocks fell on Friday in muted trading, as investors kept an eye on inflation and awaited the results of the Communist Party congress in China. Benchmarks declined in most regional markets but rose in Mumbai.
In other developments, Japan’s core consumer prices rose 3.0% in September from a year earlier, according to government data released on 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 excise tax had been ruled out, the AP reports.
The Bank of Japan maintained a very low interest rate policy, while the Federal Reserve and other central banks were raising interest rates to counteract the price hike.
Until recently, the Bank of Japan was dedicated to staving off deflation, or continued falling prices.
In currency trading, the US dollar rose to 150.38 yen from 150.09 yen, adding pressure on the Bank of Japan to adjust its monetary policy since a weak yen inflated higher prices due to higher import costs. The euro was little changed at 97.76 cents, down from 97.87 cents.
Treasury yields soared to multi-year highs, a trend that helped drive up interest rates on mortgages and other loans. The yield on the 10-year Treasury rose 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 the Fed’s future action, rose to 4.61% from 4.56%.
Investors remain concerned about inflation, as higher interest rates tend to discourage borrowing and investments, slowing economic activity. This could push economies into recession.
Stocks fell on Wall Street Thursday, with the S&P 500 down 0.8% and the Dow Jones Industrial Average down 0.3%. The Nasdaq Composite Index fell 0.6%, while the Russell 2000 Index lost 1.2%.
Corporate earnings remain a big focus on Wall Street, and results have been mixed so far.
The US labor market remains strong, with the latest government data showing that the number of Americans filing for unemployment benefits fell last week and remains historically low.
A healthy job market is a sticking point as it indicates that the Fed will have to keep raising interest rates. The central bank raised the key interest rate to a range of 3% to 3.25%. Just over six months ago, it was close to zero.
In energy trading, benchmark US crude fell 8 cents to $84.43 a barrel in electronic trading on the New York Mercantile Exchange. It lost one cent on Thursday to $84.51 a barrel. Brent crude, the international benchmark, lost two years to $92.36 a barrel.