A pedestrian looks at 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
Asia-Pacific shares were lower on Monday after Fed Chairman Jerome Powell’s speech in Jackson Hole on Friday. He warned that rising interest rates will cause “some pain” in the US economy, saying higher interest rates are likely to persist “for a while”.
The Nikkei 225 in Japan fell 2.9% and the Topix index fell 2.1%. South Korea’s Kospi fell 2.2% and the Kosdaq index fell 2.5%.
In Australia, the S&P/ASX 200 fell 2%.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.9 percent, while the Japanese yen traded at 138.27 to the dollar.
In the US on Friday, the Dow Jones Industrial Average fell 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 down inflation, they will also cause some pain for households and businesses,” Powell said. “These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean much greater pain.”
He said the Fed’s decision in September “will depend on the totality of incoming data and the evolution of the outlook.”