Asian markets fall as Japan’s ‘tankan’ shows weaker outlook

TOKYO (AP) — Asian stocks mostly fell Friday as a resurgence of Russian attacks dashed hopes of a quick end to the war in Ukraine.

Japan Benchmark Nikkei 225 NIK,
-0.46%
it fell 0.5% in morning trading.

Shares of electronics and energy giant Toshiba Corp. 6502,
+6.19%
jumped 6.7% on news that Bain Capital could make an offer to acquire the company and take it private. toshiba said he did not participate in any of those conversations.

Kospi 180721 from South Korea,
-0.76%
lost 0.6% while Australia’s S&P/ASX 200 XJO,
+0.14%
rose 0.1%. Hang Seng HSI from Hong Kong,
-0.72%
shed 0.8% and the Shanghai SHCOMP Composite,
+0.62%
added 0.6%. Benchmarks in Singapore STI,
+0.05%,
Taiwan Y9999,
-0.77%
and Indonesia JAKIDX,
-0.15%
fall gently.

The surge in COVID cases in China adds to concerns of a regional slowdown. The lockdown in Shanghai entered its second phase of extended restrictions, while restrictions were lifted in Jilin, a hard-hit country.

The pullback followed a broad decline on Wall Street, which ended its worst quarter since the pandemic broke out two years ago.

A closely watched quarterly indicator of business sector sentiment in Japan called “tankan” by the Bank of Japan found the benchmark gauge for large manufacturers fell for the first time in seven quarters, losing three points from a survey in December to 14 points from 17 points.

the war in ukraineIn addition to supply chain disruptions from major manufacturers caused by COVID-19 restrictions and rising concerns about inflation, especially rising energy costs, are clouding prospects for already fragile growth in the third largest economy in the world.

War is the single biggest factor weighing on markets, analysts say. Ukrainian President Volodymyr Zelenskyy expressed his pessimism about Russian intentions and said in his late-night video address to the nation that he expected the Russian offensive to continue for some time.

“As we approach the weekend break, optimism for a ceasefire in the geopolitical conflict continues to fade overnight,” said Yeap Jun Rong, market strategist at IG in Singapore.

On Wall Street, a 3.6% gain in March failed to offset poor January and February that left US indices lower so far this year.

The S&P 500SPX,
-1.57%
it lost 1.6% to 4,530.41. His loss since the beginning of the year is 4.9%. The Dow Jones Industrial Average DJIA,
-1.56%
it also fell 1.6% to 34,678.35. The Nasdaq Composite COMP,
-1.54%
it fell 1.5% to 14,220.52. Both indices also posted gains in March, thanks in large part to a market rally in the two weeks leading up to this week.

Oil prices fell as President Joe Biden ordered the release of up to 1 million barrels of oil for nation day strategic petroleum reserve. The move to pump more oil to market is part of an effort to rein in energy prices, which have risen nearly 40% globally this year.

US benchmark crude CLK22,
-0.54%
it fell 36 cents to $99.92 a barrel early Friday. It fell 7% on Thursday. Brent BRNK22,
-5.43%,
the international standard, lost 7 cents to $104.64 a barrel.

An overnight pullback slightly undercut what has been surging oil prices amid Russia’s invasion of Ukraine. The conflict has raised concerns that supply shortages will only worsen the persistently rising inflation that threatens businesses and consumers around the world.

A gauge of inflation that is closely monitored by the US Federal Reserve. jumped 6.4% in February compared to a year ago, marking the largest year-over-year increase since January 1982.

Energy prices have been a key factor driving inflation and Biden’s plan to release more oil into the system comes as little relief is expected from the OPEC oil cartel. The cartel and its allied oil producers, including Russia. stick to a modest raise in the amount of crude they pump into the world, a step that supports higher prices.

Banks also fell along with bond yields, forcing interest rates on loans down, making loans less profitable for banks. The 10-year Treasury yield fell to 2.34% from 2.36% on Wednesday night. Bank of America fell 4.1%.

But in Asia early Friday, the 10-year Treasury yield rebounded to 2.39%.

Higher prices for everything from energy to food are a key concern for central banks, which are moving to raise interest rates to help temper the impact.

Investors received a lukewarm update on the labor market on Thursday. more americans applied for unemployment benefits last week, but layoffs remain at record lows. Wall Street will get a more comprehensive report on Friday when the Labor Department releases employment data for March.

In forex trading, the US dollar USDJPY,
+0.77%
rose to 122.52 Japanese yen from 121.69 yen.

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