Shares of Japan, South Korea and Australia fall 2% after Powell’s speech

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A pedestrian watches the stock prices of Japanese companies from the Tokyo Stock Exchange displayed on an electronic board in Tokyo on April 30, 2021.

Yuki Iwamura | AFP | Getty Images

Shares in Asia-Pacific traded lower on Monday after Fed Chair Jerome Powell’s speech in Jackson Hole on Friday. He warned that rising interest rates will cause “some pain” to the US economysaying that higher interest rates are likely to last “for quite some time.”

The Nikkei 225 in Japan fell 2.6% and the Topix index fell 1.11%. South Korea’s Kospic fell 2.25% and the Kosdaq index fell 2.68%.

In Australia, the S&P/ASX 200 fell 1.89%.

Mainland China Shanghai composite decreased by 0.14% after a slight recovery, and the Shenzhen component: lost 0.38%.

Hong Kong Hang Seng Index lost 0.7% and the Hang Seng Tech Index fell 0.91%.

MSCI’s broadest index of Asia-Pacific stocks outside Japan fell 1.91%, while the Japanese Yen traded at 138.58 per dollar.

On Friday, the Dow Jones Industrial Average fell 1,008 points, or 3.03%, to 32,283.40 in the US. 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 inflation down, they will also cause some pain to households and businesses,” Powell said. “These are the unfortunate costs of curbing inflation. But if price stability is not restored, it would mean much more pain.”

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

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