TOKYO -- Asian shares mostly slipped Thursday as optimism over earnings was tempered by persistent concerns about inflation and the Chinese economy, despite an overnight rally on Wall Street.
Eyes are on the Bank of Japan, set to wrap up a two-day policy meeting, although analysts expect no major changes.
The BOJ has not indicated it will follow the lead of other central banks, including the U.S. Federal Reserve, in raising interest rates to curb inflation. Japan has suffered years of stagnation, when deflation or falling prices was a major problem.
“After the strong showing in Wall Street over the past two days, particularly so for tech stocks, markets may take somewhat of a breather. Lingering caution persists for Chinese equities amid both virus and property sector risks,” Yeap Jun Rong, market strategist at IG in Singapore, said in a commentary.
Tokyo's benchmark Nikkei 225 lost 0.1% to 27,657.53 in morning trading. Australia’s S&P/ASX 200 edged down 0.1% to 6,751.00. South Korea’s Kospi gained 0.4% to 2,397.33. Hong Kong’s Hang Seng slipped 1.3% to 20,612.10, while the Shanghai Composite fell 0.5% to 3,286.83.
A mid-week rally driven by strong corporate earnings appeared to be losing steam, laden by worries over energy supplies in Europe and slowing growth in China.
“Geopolitical concerns around the Russia/Ukraine conflict continue to weigh on markets as the crisis shows no signs of slowing down. Also weighing on sentiment were reports that Google was pausing new hires for two weeks. This is part of an emerging trend where tech giants are hitting the brakes on hiring,” said Anderson Alves at ActivTrades.
“Inflation concerns, ongoing geopolitical uncertainty and lingering caution over the pandemic are adding fuel to recession fears and weighing on the outlook for companies," he said in a report.
Wall Street ended Wednesday with gains as investors welcomed another batch of encouraging profit reports from U.S. companies.
The S&P 500 rose 0.6% to 3,959.90. The Dow Jones Industrial Average added 0.2% to 31,874.84, while the Nasdaq gained 1.6% to 11,897.65. Smaller company stocks also gained ground. The Russell 2000 climbed 1.6% to 1,827.95.