Asian stocks close lower, awaiting US labor market data

Asian stock markets closed lower on Friday (2), pressured by fears of global monetary tightening on the day that data on the US labor market comes out, crucial for the Federal Reserve (Fed) to make its monetary policy decisions .

Speeches by the entity’s leaders on Thursday moderated the expectation of lower interest rates in the US, after chairman Jerome Powell signaled for a milder increase in December.

In this context, the further relaxation of restrictions against Covid-19 in China took a backseat.

The Shanghai Composite index closed down 0.29%, at 3,156.14 points, while the less comprehensive Shenzhen Composite had a slight increase of 0.02%, at 2,044.60, contrary to the general movement of the day.

Hong Kong’s Hang Seng ended the trading session with losses of 0.33%, at 18,675.35 points, and South Korea’s Kospi had a sharp drop of 1.84%, at 2,434.33 points.

This Thursday, Fed leaders Michelle Bowman, Michael Barr and John Williams tried to moderate market expectations for a softer monetary tightening from now on, after Powell suggested that the hike in December will be smaller compared to the last four decisions of the entity.

The general message to the market was that inflation in the US is still too high and therefore there is a lot of work to be done to control it.

The signs came on the eve of the release of the American payroll, as the country’s jobs report is called. The median of analysts consulted by the Broadcast projections indicates the creation of 200,000 jobs in November, a number that would represent a slowdown compared to October, but still at a strong pace.

In view of this, the New York stock exchanges lost strength and ended the day mixed, with a downward bias, a movement similar to that of Asian stock markets, which still make strong accumulated gains in the last three sessions.

Among local drivers, fears of monetary tightening have left China’s efforts to ease restrictions in more cities in the background after recent protests against Beijing’s Covid-zero policy.

In Tokyo, the Nikkei index had a sharp drop of 1.59%, at 27,777.90 points. There, investors followed the speeches of Naoki Tamura, one of the members of the Board of the Bank of Japan (BoJ, for its acronym in English), who stated that the country should conduct a review of monetary and inflation policies “soon or a little later afternoon”. He was the first BoJ member to openly cite such a move.

Among other Asian markets, the Taiwanese Taiex index closed down 0.28%, at 14,970.68 points, and the Australian S&P/ASX 200 was down 0.72%, at 7,301.50 points.