Asian stocks decline against strengthening dollar, as Fed forecast more hikes ahead

September 22, 2022: Asian stocks dove on Thursday (September 22), as investors digested the U.S. Federal Reserve's latest interest rate hike and its forecast of more hikes to come in its fight against soaring inflation.

The Nikkei 225 index opened down 0.95% and repeatedly tested the 27,000 psychological barrier before falling through for the first time since July 19. It closed for the break down 0.97% at 27,047.37 points. The Bank of Japan kept ultra-low interest rates unchanged on Thursday and vowed to hold them there, contrasting against a global tide of monetary tightening by central banks.

South Korea's benchmark KOSPI fell 1.16%, to 2,319.98 points as of 0115 GMT, hitting its lowest intraday level since July 15. Hong Kong stocks slumped to the lowest since 2012 with the benchmark Hang Seng Index dropping as much as two percent to 18,080.9 points. China's Shanghai Composite Index started lower by 0.59% at 3,098.77 points.

The Fed raised rates sharply, by 75 basis points, on Wednesday (September 21) - the third such rise in a row. That took the bank's benchmark overnight rate target range to 3-3.25% and led to the dollar index surging to a fresh two-decade high.

Reuters