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Asia-Pacific markets tumble ahead of Fed’s Jackson Hole

SINGAPORE — Asia-Pacific markets tumbled in early trade on Friday as investors remained cautious ahead of the Federal Reserve’s annual Jackson Hole symposium where Fed Chair Jerome Powell is due to speak.

In Australia, the benchmark ASX 200 fell 0.29% with most sectors trading lower. The heavily weighted financials subindex declined 0.4% while energy and materials also fell by 0.41% and 0.1%, respectively.

The Nikkei 225 in Japan declined 0.85% while the Topix index fell 0.74%. South Korea’s Kospi was down 0.33%.

The highly anticipated Jackson Hole symposium from the Fed will be held virtually on Friday. Investors are expecting to hear what Powell thinks about the state of the U.S. economy and how he might guide the central bank’s exit from the measures it took to rescue the economy from the Covid-19 pandemic.

“Fed chairs have a track record of foreshadowing major policy announcements at Jackson Hole, and some investors think Powell will provide further clues around the timing of a tapering announcement, which could come as soon as the FOMC meeting next month,” Tapas Strickland, director of economics and markets at the National Australia Bank, wrote in a Friday morning note.

Strickland pointed out that an announcement on tapering is “highly likely” to come before the end of the year.

In overnight trade, the three major U.S. indexes finished lower during Thursday’s regular trading session. The Dow snapped a four-day win streak while the S&P 500 and the Nasdaq Composite both broke five-day win streaks.

In the currency market, the U.S. dollar last traded at 93.066 against a basket of its peers. The greenback fell from levels above 93.600 reached in the previous week.

The Japanese yen traded at 109.99 against the dollar, strengthening from an earlier level around 110.09. Meanwhile, the Australian dollar changed hands at $0.7223, down some 0.15%.

Oil prices rose Friday during Asian trading hours, where U.S. crude added 0.25% to $67.59 while global benchmark Brent rose 0.14% to $71.17. Prices fell overnight as new Covid outbreaks raised concerns about the recovery in global demand for oil.

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