Asia stock markets decline amid inflation, oil price worries

TOKYO (AP) — Asian shares mostly fell Wednesday as worries about inflation set off expectations the U.S. Federal Reserve might move faster than anticipated to raise interest rates.

Japan's Nikkei 225 dropped 1.6% to finish at 29,302.66, following a national holiday Tuesday, as technology shares especially took a hit over the speculation about the Fed's moves. South Korea's Kospi slipped 0.1% to 2,993.80. Australia's S&P/ASX 200 edged down 0.2% to 7,399.40. Hong Kong's Hang Seng rose 0.6% to 24,788.50, while the Shanghai Composite edged up 0.2% to 3,594.45.

“Markets continue to shift their expectations toward a tighter Fed monetary policy," said Yeap Jun Rong, a market strategist at IG, adding that investors will be watching for U.S. data being released later in the day.

Some Asian central banks have already begun to raise interest rates to tamp down inflation. New Zealand's raised its benchmark interest rate by 0.25% Wednesday to 0.75%.

In October the Reserve Bank raised it from a record low 0.25% to 0.5%, the first such hike in more than seven years, removing some support it put in place when the coronavirus pandemic began.

The Fed will release minutes later in the day from its October policy meeting, potentially giving investors more details on the central bank’s plan to start trimming bond purchases that have helped keep interest rates low.

Investors have been watching to see if pressure from rising inflation will goad the Fed into speeding up its plans for trimming bond purchases and raising its benchmark interest rate.

Wall Street closed out a wobbly day of trading, as gains in banks and energy companies tempered losses elsewhere in the market. The S&P 500 managed to rise 0.2% to 4,690.70 after wavering between small gains and losses for much of the...