By Kevin Buckland
TOKYO (Reuters) – Asian stocks followed Wall Street sharply lower and bonds rallied on Friday as risk sentiment deteriorated amid mounting concerns that inflation could persist even after global growth spikes .
Japan’s Nikkei fell 1.86%, while the larger Topix slipped 1.95%.
Australian stocks fell 2.05% and South Korea’s Kospi lost 1.51%.
An MSCI index of Asia-Pacific stocks fell 1.07%.
Chinese markets are closed one week from Friday for the Golden Week holidays.
“It is questionable whether this is really stagflation or not, but the whole growth-inflation backdrop seems to have shifted to a less favorable backdrop,” said Rob Carnell, Asia-Pacific research manager. at ING in Singapore.
“Whether this is really going to take hold and create problems for years to come, we don’t need to know just yet – it’s scary enough that what we’re seeing in the markets is justified.”
US equity futures were down 0.51% for the S&P 500, after the index fell 1.19% overnight.
Futures on the Nasdaq also reported a decline of 0.49%, adding to Thursday’s 0.43% loss.
The benchmark 10-year Treasury bill continued to rally in Tokyo exchanges, with the yield sliding to its lowest since September 28 at 1.48%.
The dollar index, which measures the currency against six major rivals, was down from Thursday’s one-year high at 94.504, changing hands for the last time at 94.326.
Federal Reserve Chairman Jerome Powell said on Wednesday that resolving the “tension” between high inflation and high unemployment was the Fed’s most pressing issue, acknowledging a potential conflict between the bank’s two goals central American firm of stable prices and full employment.
China has been of particular concern to investors, hit by regulatory restrictions in the tech and real estate sectors, and now grappling with an electricity shortage that threatens to push up energy prices worldwide.
Crude prices continued to decline on Friday after Brent broke above $ 80 a barrel earlier in the week for the first time in three years.
Brent crude futures were largely flat from Thursday at $ 78.32, while US crude futures were also little changed at $ 75.07.
Gold, an inflation hedge and safe haven, fell 0.1% to $ 1,755.35 an ounce, following Thursday’s 1.77% rise, the largest since March.
(Reporting by Kevin Buckland; Editing by Lincoln Feast.)