Markets Asian shares mixed in light ‘Golden Week’ trading

Asian shares are mixed in light “Golden Week” trading with markets in China, Japan and some other countries closed for holidays.

Investors are watching to see what the U.S. Federal Reserve does as it accelerates efforts to curb inflation. The central bank is expected to raise short-term interest rates by double the usual amount when it releases its latest statement yesterday. It has already raised its key overnight rate once, for the first time since 2018, and Wall Street is expecting several big hikes in coming months.

That will make it more costly to borrow — for a car, a home, a credit card purchase and may weaken the economy. It also would draw investments out of stocks into other assets as their yields rise. Ultra-low interest rates helped drive stocks to unprecedented highs during the pandemic and now that process is being reversed.

Central banks in many other countries are also raising rates to try to bring price increases under control.

The Reserve Bank of Australia was due to decide on a rate hike Tuesday. New Zealand has begun raising rates, as have some other central banks in the region apart from Japan and China, where economic recoveries have been slowed by efforts to tame recent outbreaks of coronavirus.

“For the session ahead, traders will be working on positioning ahead of the FOMC (Fed) and watching the RBA Meeting, where much firmer-than-expected […] consumer price index data in Australia may have pitched the scales towards a rate hike,” Anderson Alves of ActivTrades said in a commentary.

Australia’s S&P/ASX 200 edged 0.1% lower to 7,338.00.

Hong Kong’s Hang Seng lost 0.3% to 21,028.01 and the Kospi in South Korea rose 0.5% to 2,699.93.

On Monday, a late-afternoon turnaround led by technology stocks left major indexes moderately higher on Wall Street, averting more losses following a brutal April when widespread tech sell-offs dragged down major benchmarks.

The S&P 500 rose 0.6% to 4,155.38, while the Dow Jones Industrial Average gained 0.3% to 33,061.50. The Nasdaq climbed 1.6% to 12,536.02.

Smaller company stocks also reversed course after spending much of the day in the red. The Russell 2000 index rose 1% to 1,882.91.

Bond prices fell, pushing yields higher. The yield on the 10-year Treasury was at 2.98% after rising to 3.00% on Monday. It hadn’t been above 3% since Dec. 3, 2018, according to Tradeweb.

ELAINE KURTENBACH, MDT/AP