Asian stocks were mixed on Monday after strong U.S. jobs data cleared the way for more interest rate hikes and China reported its exports rose by double digits.
Shanghai and Tokyo advanced while Hong Kong and Seoul retreated. Oil prices edged higher.
Wall Street's benchmark S&P 500 lost 0.2% on Friday after government data showed American employers added more jobs than expected in June. That undercut expectations a slowing economy might prompt the Fed to postpone or scale back plans for more rate hikes to cool inflation.
“Now it seems they will be debating whether they need to be even more aggressive,” Edward Moya of Oanda said in a report.
The Shanghai Composite Index shed less than 0.1% to 3,226.04 after China's July exports rose 18%, beating forecasts. The Hang Seng in Hong Kong fell 0.7% to 20,055.39 while the Nikkei 225 in Tokyo gained 0.2% to 28,241.09.
The Kospi in Seoul declined 0.3% to 2,482.32 and Sydney's S&P-ASX 200 shed 0.1% to 7,005.40.
On Wall Street, the S&P 500 declined to 4,145.19 on Friday while the Dow Jones Industrial Average added 0.2% to 32,803.47. The Nasdaq composite lost 0.5% at 12,657.55.
Investors worry that tighter policy from the Fed and central banks in Europe and Asia to cool inflation that is running at multi-decade highs might derail global economic growth.
Markets also have been rattled by Russia’s war on Ukraine, which has caused prices of oil, wheat and other commodities to spike and by uncertainty about the impact of Chinese anti-virus curbs that have disrupted manufacturing and shipping.
China’s exports in July surged 18% compared with a year earlier while imports rose just 2.3%, reflecting weak global demand, customs data showed Sunday. The country’s global trade surplus swelled to a record $101 billion.
Last week's strong U.S. employment data gave ammunition to Fed officials who say the economy can tolerate higher borrowing costs to cool inflation. After Friday's announcement, traders expect the Fed to raise its benchmark rate by 0.75 percentage points next month, up from forecasts of half a point. That would be triple the usual margin and the third such outsize hike this year.
Higher interest rates are meant to dampen inflation by cooling business activity, but that also raises the risk of recession and job losses. The latest inflation spike is unusual because forecasters blame shortages of goods due to the coronavirus pandemic, rather than rapid economic growth.
Wall Street is coming off the best month for stocks since late 2020, a rally driven mostly by what had been falling bond yields. Traders hoped the economy was slowing enough for the Fed to ease off.
In energy markets, benchmark U.S. crude edged up 7 cents to $89.08 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 47 cents to $89.01 on Friday. Brent crude, the price basis for international trading, added 1 cent to $94.93 per barrel in London. It gained 80 cents to $94.92 the previous session.
The dollar rose to 135.28 yen from Friday's 135.11 yen. The euro advanced to $1.0181 from $1.0178.
