Shares in Asia have fallen after the chairman of the US central bank said it would continue to raise interest rates to tackle soaring prices.
Jerome Powell warned that the Federal Reserve's policies will
cause "some pain to households and businesses".
Higher interest rates make borrowing more expensive for
individuals and companies, which could slow economic growth as well as
inflation.
Japan's Nikkei 225 index closed 2.7% lower on Monday in
Tokyo.
Elsewhere in the Asia-Pacific region, the Kospi in South
Korea and Australia's ASX 200 were both down by around 2%, while the Hang Seng
in Hong Kong was 0.8% lower.
That came after the main share indexes in New York each fell
by more than 3% on Friday after Mr Powell's remarks.
During a highly-anticipated speech at a conference in Jackson
Hole, Wyoming, Mr Powell said the Federal Reserve was likely to continue
raising interest rates in the coming months and could keep them high "for
some time".
He said that, while the hikes would come at a cost to
American households and businesses, "a failure to restore price stability
would mean far greater pain".
Inflation in the world's largest economy by gross domestic
product (GDP) is at a four-decade high.
"Fed Chair Powell went for the jugular, conveying (an)
unflinching assault on inflation," Vishnu Varathan, head of economics and
strategy at Mizuho Bank, said in a note.
"Justification for this unrelentingly hawkish posture
was as plain as it was unequivocal," he added.
Investors are also concerned that the Chinese economy is
slowing, Dan Wang, chief economist at Hang Seng Bank China, told the BBC.
"The economic perspective has worsened in China due to
prolonged Covid control, which means further policy rate cuts have to take
place. Domestic demand is too weak without further rate cuts in China,"
she said.
China's central bank cut its lending rates earlier this month
after economic growth slowed sharply
in the second quarter of this year.
Power shortages in the Sichuan
province have also hit major manufacturers of cars and
smartphones in China.
Over the weekend, official data showed that profits of China
industrial firms had fallen by 1.1% from January to July, from a year earlier.
A crisis in the country's property market is also proving to
be a major challenge to government efforts to keep the economy growing.
Source:
BBC