TOKYO — Asian shares traded mixed on Wednesday as investors weighed recent data highlighting a slowing U.S. economy, which offers both upside and downside for Wall Street.
Japan's benchmark Nikkei 225 lost 0.9% to 38,490.17. The Australian S&The P/ASX 200 rose 0.4% to 7,769.00. South Korea's Kospi rose 1.0% to 2,689.50. Hong Kong's Hang Seng fell almost 0.1% to 18,428.62, while the Shanghai Composite fell 0.8% to 3,065.40.
Analysts said recent data on Japan's wage growth will become clearer once the results of recent labor negotiations emerge in the spring. That means the Bank of Japan will likely raise interest rates.
On Tuesday the S&The P500 rose 0.2% to 5,291.34, although more stocks within the index fell than rose. The Dow Jones Industrial Average rose 0.4% to 38,711.29, and the Nasdaq composite rose 0.2% to 16,857.05.
The action was stronger in the bond market, where Treasury yields fell after a report showed that U.S. employers advertised fewer job openings in late April than economists expected.
Wall Street actually wants the labor market and the overall economy to slow down enough to get inflation under control and convince the Federal Reserve to do so reduce interest rates. That would relieve pressure on the financial markets. Traders have raised their expectations for interest rate cuts later this year in response to the report data from CME Group.
The risk is that the economy could overshoot and enter a painful recession, which would trigger layoffs of workers across the country and weaken corporate profits, sending stock prices down.
Tuesday's report stated the number US vacancies at the end of April fell to the lowest level since 2021. The numbers indicate a return to “a normal labor market” after years of strange numbers caused by the COVID-19 pandemic, said Bill Adams, chief economist at Comerica Bank.
But it also followed a report on Monday showing that US manufacturing contracted in May for the 18th time in 19 months. Concerns about a slowing economy have hit crude oil prices in particular this week, raising the possibility of weaker fuel demand growth.
A barrel of US crude oil has fallen almost 5% this week and is back to around the level of four months ago. That left oil and gas stocks among the market's heaviest losses for the second day in a row. Halliburton fell 2.5%.
Benchmark U.S. crude lost 8 cents to $73.17 a barrel. Brent crude, the international standard, fell 8 cents to $77.47 a barrel.
Companies whose profits tend to rise and fall with the cycle of the economy also suffered sharp losses, including steelmakers and mining companies. Copper and gold miner Freeport-McMoRan lost 4.5%, and steelmaker Nucor fell 3.4%.
The smaller companies in the Russell 2000 index, which tend to thrive when the U.S. economy is at its best, fell 1.2%.
In currency trading, the US dollar rose from 154.84 yen to 155.90 Japanese yen. The euro was at $1.0875, down from $1.0883.
