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TOKYO (AP) — Asian shares were trading mixed Wednesday following a decline on Wall Street after reports on the U.S. economy came in weaker than expected.
Japan's benchmark Nikkei 225 lost 1.7% in afternoon trading to 27,808.75. Australia's S&P/ASX 200 stood little changed, inching down less than 0.1% to 7,232.60. South Korea's Kospi added 0.5% to 2,493.83. Trading was closed in Hong Kong and Shanghai for the Qingming Festival, a holiday.
New Zealand's benchmark fell 0.3% after the central bank surprised economists by imposing an aggressive half-point rate rise to bring its policy interest rate to 5.25%. It was the Reserve Bank of New Zealand’s 11th straight rate hike as it tries to cool inflation, which is running at 7.2%, far above the bank’s target level of around 2%.
Central banks have diverged somewhat in adjusting interest rates to reflect the latest trends in their economies. On Tuesday, Australia's central bank kept its rate at 3.6%, citing a need for time to assess where the economy is headed as inflation moderates.
On Wall Street, the S&P 500 dropped 0.6% to 4,100.60, breaking a four-day winning streak. The Dow Jones Industrial Average fell 0.6%, to 33,402.38. The Nasdaq composite sank 0.5% to 12,126.33.
Investors are still split on whether the U.S. economy will fall into a recession and how badly corporate profits might drop. The biggest question remains what the Federal Reserve will do next with interest rates after hiking them furiously over the last year to get high inflation under control.
The reports on job openings and factory orders released Tuesday may have heightened recession fears. But they may also give the Fed reason to hold rates steady at its next meeting, for the first time in more than a year, offering a possible upside for markets.
One report showed employers advertised 9.9 million job openings in February, a sharper fall-off than economists expected. The Fed has been paying close attention to the numbers because the job market has remained so strong despite higher rates. The hope is that a softening in the number of openings could take some pressure off inflation without having to throw many people out of work.
A separate report showed that factory orders weakened in February more than economists expected.
A potentially more impactful report will arrive with Friday's update on how many jobs were created across the country last month.
Traders flipped bets back toward the Fed holding steady on rates at its meeting next month. A day earlier, a slight majority was betting on another increase in rates. That helped yields in the bond market to fall.