Asian stocks sag with dollar on hawkish Fed, China COVID worries

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Asian stocks sagged on Thursday, tracking declines on Wall Street after the U.S. Federal Reserve projected higher interest rates would persist for a while.

slumped 0.94%, after climbing as high as 160.37 in the previous session for the first time since late August.lost 0.61%, although e-Mini futures pointed to a slight 0.09% bounce for Thursday's reopen.

The comments followed the Fed's decision to raise the benchmark rate by an as-expected half a percentage point - down from recent 75 basis point increases - but projected a terminal rate above 5%, a level not seen since a steep economic downturn in 2007. The 10-year Treasury yield slipped to 3.49% in Tokyo trading, with the two-year yield also edging lower to 4.24%.

Some analysts interpreted the reaction in rates and currency markets as a sign that traders doubt Powell's policy narrative, retaining bets for an earlier easing of inflation and sooner Fed pivot.

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