Japan’s benchmark Nikkei 225 dipped 2.7% to finish at 27,878.96. Australia’s S&P/ASX 200 dropped 2.0% to 6,965.50. South Korea’s Kospi slipped 2.2% to 2,426.89. Hong Kong’s Hang Seng slid 0.7% to 20,023.22, while the Shanghai Composite recouped earlier losses and edged up 0.1% to 3,240.73.
Also weighing on regional sentiments are Chinese economic data over the weekend, which seem to indicate a strong recovery will take time. China’s January-July industrial profits sank 1.1% from a year ago amid fresh COVID-19 restrictions. Higher rates help corral inflation, but they also hurt asset prices. Powell acknowledged the increases will hurt U.S. households and businesses, in perhaps an unspoken nod to the potential for a recession. But he also said the pain would be far greater if inflation were allowed to fester and that “we must keep at it until the job is done.”