Japan’s Nikkei fell 1.8 per cent, while Hong Kong’s Hang Seng Index sank 3 per cent. Chinese markets were closed for the week because of the Golden Week holiday. — Reuters picSINGAPORE, Oct 3 — Asian shares slid today to their lowest this year as worries over higher U.S interest rates for longer period gripped markets, while the yen wobbled near a one-year low, keeping traders on alert for a possible intervention.
US Federal Reserve officials said monetary policy will need to stay restrictive for “some time” to bring inflation back down to the central bank’s 2 per cent target. Fed funds futures traders are pricing in a 26 per cent chance of a rate hike in November, and a 45 per cent likelihood of an increase by December, according to the CME Group’s FedWatch Tool.
The central bank, however, repeated a warning that further tightening might be needed to bring inflation to heel in a “reasonable timeframe”.In the foreign exchange market, the focus remains on the Japanese yen as the currency inches closer to the 150 per dollar mark — a level traders have speculated could lead to intervention from the authorities.
Japanese Finance Minister Shunichi Suzuki said today authorities were watching the currency market closely and stood ready to respond, repeating a warning against speculative moves that did not reflect economic fundamentals.