Asian shares track Wall St decline; BOJ policy unchanged

By ELAINE KURTENBACH
AP Business Writer

BANGKOK (AP) — Shares were mostly lower in Asia on Friday after Wall Street benchmarks extended losses amid uncertainty over rising coronavirus cases and the risks to pandemic recoveries.

Stocks fell in Tokyo, Seoul and Shanghai but rose in Hong Kong. U.S. futures and oil prices were nearly unchanged.

The Bank of Japan kept its policy settings intact Friday but downgraded its growth forecast for the current fiscal year slightly, to 3.5%-4% from 3.5%-4.4%. It said the outlook for the world’s No. 3 economy was “highly unclear” and depends on how the COVID-19 situation unfolds.

Tokyo reported a 6-month high number of new cases on Thursday, 1,308, just over a week before the Olympic Games are due to begin, a year later than originally planned due to the pandemic. With most of its population not fully vaccinated, many in Japan worry the Olympics will raise the risks of further outbreaks at a time when the delta variant of COVID-19 is causing flare-ups worldwide.

Tokyo’s Nikkei 225 index lost 0.8% to 28,060.61 while the Kospi in Seoul declined 0.6% to 3,266.65. The Shanghai Composite index declined less than 0.1% to 3,563.79. Hong Kong’s Hang Seng rose 0.5% to 28,121.00. In Australia, the S&P/ASX 200 edged up less than 0.1% to 7,339.70.

The yield on the 10-year Treasury note rose to 1.32% from 1.30% late Thursday.

On Thursday, major U.S. stock indexes closed mostly, pulling back further from the record highs they reached at the start of the week.

The S&P 500 fell 0.3% to 4,360.03. The benchmark index is now on pace for its first weekly loss in four weeks.

The tech-heavy Nasdaq slid 0.7% to 14,543.13. The Dow Jones Industrial Average bucked the trend and bounced back after being down much of the day. The blue-chip index gained 0.2% to 34,987.02.

The Russell 2000 index of small cap stocks lost 0.6% to 2,190.29.

Technology and communications stocks, and companies that rely on consumer spending, accounted for much of the pullback, outweighing gains elsewhere in the market.

Energy stocks fell following a broad slide in energy prices. Among the winners were financial stocks, including banks, which have been reporting mostly solid earnings.

Investors are watching where the economy is headed as the pandemic wanes and on what companies have to say about how higher inflation is affecting their businesses.

On Thursday, Federal Reserve Chair Jerome Powell delivered his second day of testimony before Congress. He reiterated that signs of inflation should ease or reverse over time, as the U.S. emerges from an unparalleled economic reopening following the pandemic-induced recession.

The government said Wednesday that inflation at the wholesale level jumped 1% in June, pushing price gains over the past 12 months up by a record 7.3%. That followed a report a day earlier showing consumer prices posted the biggest 12-month gain in 13 years.

New data on applications for unemployment benefits signaled the labor market continues to improve. The Labor Department said Thursday that unemployment claims fell by 26,000 last week to 360,000, the lowest level since the pandemic struck last year.

More companies released their latest quarterly earnings Thursday. Progressive fell 2.6% after the insurance company’s results fell far short of analysts’ forecasts. Morgan Stanley rose 0.2% after reporting a 10% rise in quarterly profits from a year earlier.

American International Group, better known as AIG, rose 3.6% after the insurance company reached a deal with Blackstone Group to help manage some of its life insurance assets.

Many companies will begin reporting next week when earnings season gets into full swing.

In other trading Friday, U.S. benchmark crude oil lost 6 cents to $71.59 per barrel in electronic trading on the New York Mercantile Exchange. It gave up $1.48 to $71.65 per barrel on Thursday. Brent crude, the international pricing standard, shed 7 cents to $73.40 per barrel.

The U.S. dollar rose to 109.99 Japanese yen from 109.85 yen. The euro slipped to $1.1812 from $1.1813.

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