South Korea, Japan stocks down 2% after Powell’s speech

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

Stocks in the Asia-Pacific region traded lower on Monday after Fed Chairman Jerome Powell’s speech in Jackson Hole on Friday. He warned that interest rate hike will cause ‘some pain’ for US economysaying higher interest rates are likely to persist “for some time.”

The Nikki 225 in Japan was down 2.9% and the Topix index was down 2.1%. South Korea Kospi fell 2.2% and the Kosdaq index fell 2.5%.

In Australia, the S&P/ASX 200 fell 2%.

MSCI’s broadest Asia-Pacific ex-Japan equity index fell 0.9%, while the japanese yen traded at 138.27 to the dollar.

On Friday in the United States, the Dow Jones Industrial Average plunged 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 looser labor market conditions will reduce inflation, they will also hurt households and businesses,” Powell said. “These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.”

He said the Fed’s decision in September “will depend on the totality of incoming data and how the outlook evolves.”

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