TOKYO- Asian stocks lost ground on Monday, retreating from over three-week highs as worries about a global economic downturn sapped investors’ risk appetite.
Bond yields eased amid bets that a US recession would slow the Federal Reserve’s aggressive tightening campaign, with markets looking for policy clues from its two-day Federal Open Market Committee meeting which begins on Tuesday.
At the same time, the dollar built on its recovery from a 2 1/2-week low against major peers, supported by demand for the US currency as a safe haven.
“Risk markets are obviously priced for some kind of slowdown, but are they priced for an outright recession? I would argue no,” said Ray Attrill, head of currency strategy at National Australia Bank.
“In that sense, it’s hard to say we’ve reached a bottom as far as risk sentiment is concerned.”
Japan’s Nikkei retreated 0.75 percent, while Chinese blue chips eased 0.13 percent.
Hong Kong’s Hang Seng slid 0.45 percent, with its tech index tumbling 1.51 percent
MSCI’s broadest index of Asia-Pacific shares lost 0.62 percent to 158.68, after touching the highest since June 29 at 160.03 on Friday.
US S&P 500 emini futures slipped 0.09 percent, pointing to an extension of the benchmark’s 0.93 percent slump on Friday, when a survey showed business activity contracting for the first time in nearly two years amid persistently heated inflation and rapidly rising interest rates.
Earlier that day, data also showed euro zone business activity unexpectedly shrank.
Nasdaq futures eased 0.04 percent, after a 1.77 percent tumble for the tech-heavy stock index, as the bottom dropped out from under Snap Inc after the Snapchat owner posted its weakest-ever sales growth.
Investors are on guard this week for how much a strong dollar will hurt financial results from heavyweights Apple and Microsoft, among others.
