Asian stock markets fell as interest rate uncertainty worsened ahead of the release of US wage data By Investing.com

Investing.com– Most Asian stocks fell on Friday, tracking overnight losses on Wall Street as hawkish signals from Federal Reserve officials sparked uncertainty about a U.S. interest rate cut, especially ahead of the release of key payrolls data.

Risk appetite has been largely curbed by fears of a worsening conflict in the Middle East as Iran threatens military action against Israel. Regional trading volume also decreased slightly due to the Chinese market closure.

Asian shares took a weak lead from Wall Street as U.S. benchmarks fell more than 1% on Thursday after Federal Reserve officials warned inflation would delay a potential interest rate cut this year. Expectations for data expected to be reflected in the Federal Reserve’s outlook also unnerved markets.

U.S. stock futures were quiet in Asian trading.

Japan’s Nikkei 225 leads losses due to strong yen

Japan was by far the worst performer in Asia, falling 2.5% on Friday to its lowest level in two weeks.

After the Nikkei index soared to an all-time high in March, profit-taking was prolonged. The index also struggled to make gains in April due to heightened uncertainty about the path of inflation and monetary policy. Sticky inflation could trigger further interest rate hikes by the Bank of Japan.

Export-oriented stocks were the biggest decliners on the Nikkei index, rebounding from recent losses to a two-week high. The continued threat of Japanese government intervention in currency markets was a key driver of the yen’s recovery.

The Japanese stock market also fell, falling 1.7%.

Other Asian stocks fell, while technology stocks tracked overnight losses in U.S. stocks.

South Korea fell more than 1%, while the index’s largest stock, Samsung Electronics (KS:), fell 1.5% despite forecasting a strong rebound in first-quarter profits.

Hong Kong’s index fell 1.1% on Thursday as post-holiday catch-up trading factors came into play.

Australia fell 0.9% due to losses in major banking and mining stocks. Data on Friday showed Australia’s February decline was larger than expected, as iron ore exports to China continued to decline.

India’s Nifty 50, Sensex hit record highs as they tab RBI

Indian indices closed at a record high on Thursday, pointing to a flat opening after the index.

The rally was fueled primarily by buying into index-heavy banking and industrial stocks, amid some positioning ahead of the 2024 general elections. A recovery in small-cap stocks also helped sentiment.

The focus was also squarely on the conclusion of the meeting later on Friday. The central bank is widely expected to keep its policy rate at 6.5%, but the outlook for inflation and economic growth will be closely watched.