Asian stocks fall on Fed rate hike concerns

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Investors remain unsure on how much the Federal Reserve will raise interest rate

Asian stocks tracked Wall Street losses and the yen fell on Friday as investors remained filled with uncertainty over how aggressively the Federal Reserve would raise interest rates to tackle inflation despite softer numbers earlier this week.

Japan’s Nikkei was the major outlier, surging 2.37% to its highest level since January as markets reopened following a national holiday.The slight easing of inflation readings this week had driven global stocks higher and capped a rising dollar, until a string of Fed speakers put paid to expectations of the central bank going slow on further policy tightening. China’s blue-chip stock index posted its biggest jump in more than three months on Thursday.

The S&P 500 closed down 0.07% and the Nasdaq Composite lost 0.58% overnight, though the Dow Jones Industrial Average rose 0.08%. Chicago Fed president Charles Evans said he believes the Fed is likely to need to lift its policy rate to 3.25%-3.5% this year and to 3.75%-4% by the end of next year, in line with what Fed chair Jerome Powell signalled after the Fed’s latest meeting in July.

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