Trading in Asian markets is mixed and muted ahead of a key speech by the Fed chairman

TOKYO (AP) — Asian stocks were mixed in lower trading Friday ahead of a speech by Federal Reserve Chairman Jerome Powell that could provide clues about how quickly and deeply the Fed may cut interest rates.

Japan’s benchmark Nikkei 225 rose 0.5 percent to 38,408.44. Australia’s S&P/ASX 200 fell 0.1 percent to 8,017.10. South Korea’s Kospi fell 0.1 percent to 2,704.79. Hong Kong’s Hang Seng fell 0.4 percent to 17,569.38, while the Shanghai Composite gained 0.3 percent to 2,856.73.

Japan’s interest rate plans have also been closely watched. Bank of Japan Governor Kazuo Ueda, in his comments to parliament, appeared to indicate that more hikes could be coming, but that they would be gradual. The Bank of Japan has been closely monitoring recent fluctuations in stock prices and currencies, but saw recent wage increases as a positive sign, he said.

Japan’s economy has been dragged down by years of deflation, a gradual decline in prices that reflects a stagnant economy. The bank ended negative interest rates in March, then raised rates in July.

“We maintained a very loose monetary policy until March. The point was our commitment to that until it is confirmed that the economy is on track to achieve gradual, stable price growth that is sustainable,” Ueda told lawmakers.

Next week, data on GDP, or gross domestic product, the value of a nation’s goods and services, from the US, Canada, Germany and India.

On Wall Street, the S&P 500 fell 0.9 percent in its worst day after a two-week rally. The Dow Jones Industrial Average fell 177 points, or 0.4 percent, and the Nasdaq Composite fell 1.7 percent.

Weighing on stocks was a mixed picture of the US economy, which slowed under the weight of high interest rates aimed at keeping inflation in check.

A report showed slightly more US workers filed for unemployment benefits last week than expected.

A second report suggested that business activity in the US remains deeply divided. Growth in services businesses is accelerating, according to preliminary data from S&P Global Market Intelligence. But the country’s manufacturing sector appears to be contracting at a more severe pace.

“Growth has become increasingly dependent on the services sector as manufacturing, which often drives the business cycle, has fallen into decline,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.

The Fed pulled its key interest rate to the highest level in more than two decades. With inflation slowing, the general expectation is that the Federal Reserve will cut interest rates at its next meeting in September, which would be the first easing since the collapse of the COVID-19 pandemic in 2020.

The story continues

That’s why so much attention is being paid to Jackson Hole, Wyoming, where Powell will speak Friday at an economic symposium that has played host to big Fed policy announcements in the past.

One danger is if expectations for future cuts have gone overboard with investors. US companies continue to report mostly better-than-expected earnings for the spring.

Shares in Zoom Video Communications, one of the winners of the pandemic that later saw its fortunes weakened, climbed 13 percent after delivering better-than-expected results and earnings.

Overall, more stocks fell on Wall Street than rose, including Nvidia, which was the S&P 500’s biggest weight.

Overall, the S&P 500 fell 50.21 points to 5,570.64. The Dow fell 177.71 to 40,712.78 and the Nasdaq lost 299.63 to 17,619.35.

In the bond market, the 10-year Treasury yield rose to 3.86 percent from 3.80 percent late Wednesday.

In energy trading, benchmark U.S. crude rose 9 cents to $73.10 a barrel. Brent crude, the international standard, rose 10 cents to $77.32 a barrel.

In currency trading, the US dollar fell to 145.78 Japanese yen from 146.24 yen. The euro was at $1.1131, up from $1.1115.

___

AP Business Writer Stan Choe contributed. Yuri Kageyama is on X: https://x.com/yurikageyama