Asian shares eased on Friday, tracking a dive on Wall Street, while the dollar firmed as strong U.S. data revived fears the Federal Reserve will have to retain its hawkish stance to tame inflation.
MSCI’s broadest index of Asia-Pacific shares outside Japan slid 0.69%, snapping a two-day winning streak. Wall Street’s major averages closed lower on Thursday with the technology-heavy Nasdaq dropping 2%.
Australia’s S&P/ASX 200 index lost 1.01%, while Japan’s Nikkei opened 1% lower.
U.S. weekly jobless claims data pointed to a still tight labour market, while the economy rebounded faster than previously estimated in the third quarter.
The data from the United States “flamed fears that further monetary policy tightening in 2023 will be necessary to cool inflation,” said Tony Sycamore, a market analyst at IG.
The slew of data, which would normally be viewed positively, has fuelled investor fears that the Fed funds target rate could rise higher and stay there longer than previously expected, raising the possibility of an economic contraction.
China stocks opened lower, while the Hong Kong stock market also fell on recession worries as China grappled with a surge in infections after Beijing abandoned its strict zero-COVID policy to contain the virus.