Shares fall across Australia, Japan and South Korea as investors turn cautious

SINGAPORE — Shares fell across Asia-Pacific markets on Wednesday as investors turned cautious, despite remarks overnight from Federal Reserve Chair Jerome Powell that attempted to ease some worries around higher interest rates and inflation.

In Australia, the benchmark ASX 200 fell 0.52%, led by losses in most sectors, including a 0.11% drop in the heavily-weighted financials subindex. Among the so-called Big Four banks in the country, ANZ shares were down 0.3% and Westpac fell 0.66%. National Australia Bank shares reversed earlier losses to trade up 0.36%, while Commonwealth Bank shares hovered close to the flatline.

Japanese markets returned to trade after being shut on Tuesday for a public holiday. The Nikkei 225 fell 0.91% while the Topix index was down 1%.

South Korean shares also tumbled, with the main Kospi index down 0.31% and the Kosdaq lower by 0.16%.

The session in Asia follows a mixed finish on Wall Street, where the Dow Jones Industrial Average reversed steep losses following Powell’s remarks.

Powell said in his testimony to U.S. Congress that the American economy is a long way from its employment and inflation goals and that it will likely take time for substantial further progress to be achieved. He added that inflation is still “soft” and that the Fed is committed to current policy.

Central banks are taking a mixed view on the rise in yields, according to Tapas Strickland, director of economics and markets at the National Australia Bank.

“Chair Powell has managed to tread that fine line of endorsing market moves, but not adding to them by re-iterating his dovish stance,” Strickland wrote in a morning note.

In the currency market, the U.S. dollar last traded at 90.082 against a basket of its peers, recovering from a previous low around 89.943. The Australian dollar traded up by 0.11%, changing hands at $0.7979 while the Japanese yen was at 105.32 per dollar.

The greenback “fell in line” with U.S. equities following Powell’s Congressional testimony, but the moves in the currency were “modest,” according to Carol Kong, a currency strategist at the Commonwealth Bank of Australia.

Better U.S. and global growth prospects remain consistent with a downtrend in the counter-cyclical dollar, Kong said.

Elsewhere, oil prices dipped. U.S. crude futures were down 0.75% at $61.21 a barrel on Wednesday during Asian trading hours.