Live News: Asia-Pacific stocks fall after comments about Powell rate hike

Japan’s current account deficit hit a record high in January, according to Treasury Department data released Wednesday morning.

At ¥1.98 trillion ($14.41 billion), Japan’s trade deficit for the month significantly beat market forecasts. It was also the country’s largest ever recorded one-month deficit.

Because Asia’s second-largest economy relies heavily on fuel and raw material imports, officials blamed rising energy costs — as well as weak exports to China during the Chinese New Year holiday — for the record deficit.

Asia-Pacific stocks retreated Wednesday morning after investors were spooked by aggressive remarks from Federal Reserve Chairman Jay Powell.

The South Korean Kospi lost 1.1 percent and the Australian S&P/ASX 200 fell 0.9 percent. Futures for the Hang Seng index in Hong Kong were 1.3 percent lower.

Powell warned Tuesday that the Fed was ready to return to bigger rate hikes to fight inflation. His comments pushed the yield on the two-year US Treasury above 5 percent for the first time since 2007. The S&P 500 and Nasdaq Composite fell 1.5 percent and 1.2 percent, respectively.

Jakarta: China and the Association of Southeast Asian Nations will meet in the Indonesian capital to discuss the South China Sea, where tensions have risen amid overlapping territorial claims between a number of ASEAN member states and Beijing.

merits: Cathay Pacific announces the results. Hong Kong airport traffic has recovered from the trough of the pandemic, but passenger numbers still remain significantly lower than in 2019.

Markets: Equities fell in Japan and futures in Hong Kong were lower. Wall Street shares fell after Federal Reserve Chairman Jay Powell warned that the central bank could raise rates more aggressively if the economy grows too fast.

Elon Musk said Twitter could post positive cash flow again next quarter, if the CEO tries to cut costs, lure advertisers back and navigate the platform’s technical woes.

Speaking at a Morgan Stanley investor conference on Tuesday, Musk said the cash flow from the company he bought for $44 billion last year would break even in the second quarter, adding that it could even turn positive during that period.

He said Twitter’s costs are expected to be about $3 billion a year, compared to the $4.5 billion the company would otherwise have made by 2023.

Read more about Musk’s austerity plans here.

Senate Democrats and Republicans have introduced a bill that would give the government new powers to ban Chinese apps that pose a threat to security, including the popular video-sharing platform TikTok.

Mark Warner, the Democratic chief of the intelligence committee, announced the bill on Tuesday as part of an effort to create a more coordinated approach within the government to deal with threats from countries like China, Russia and Iran.

The Restrict Act requires the Secretary of Commerce to establish a process to identify communications and information technology threats and devise solutions to address them.

Read more about the bill here.

The yield on two-year Treasury bills, which move in line with interest rate expectations, exceeded 5 percent for the first time since 2007.

Yields peaked at 5.01 percent — up 0.13 percentage points on the day — following comments on Tuesday by Federal Reserve Chairman Jay Powell, who indicated the U.S. central bank could be willing to accelerate the pace of rate hikes in response to hotter-than-expected economic data.

Investors now expect interest rates to peak at 5.6 percent in September, with some chance of a one-off cut by December.

Ukraine has denied involvement in last year’s explosions that damaged the Nordstream gas pipelines connecting Russia to Western Europe after media reports in the US and Germany suggested pro-Ukrainian operatives may have been behind the attacks.

“While I enjoy collecting funny conspiracy theories about the government of Ukraine, I have to say: Ukraine has nothing to do with the accident in the Baltic Sea and has no information about ‘pro-Ukrainian sabotage groups’,” said Mykhailo Podolyak, a adviser to President Volodymyr Zelenskyy. , wrote.

Podolyak responded to a report in The New York Times saying US officials had reviewed new information suggesting that a “pro-Ukrainian group” carried out the underwater bombings that hit both the Nordstream 1 and 2 pipelines.

Read more about the alleged perpetrators here.