Asian markets fall sharply on likely US Fed action to rein inflation

Hong Kong, June 13 (IANS) Asian stock markets have fallen sharply as soaring prices in America triggered fears the US Federal Reserve will take tougher action to rein in inflation.

At the same time, the US dollar strengthened to 135 Japanese yen for the first time in over two decades, the BBC reported.

It comes as official figures showed on Friday that US inflation hit a more than 40-year high last month.

A warning about Covid-19 infections in Beijing also added to investor concerns about global economic growth.

On Monday, Japan's benchmark Nikkei index was 2.7 per cent lower, while the Hang Seng in Hong Kong was down by 2.7 per cent, the BBC reported.

The Australian stock market was closed for the Queen's birthday public holiday.

Global oil prices have also slipped with Brent crude falling by around $1.70 to just over $120 per barrel.

Meanwhile, Bitcoin fell below $25,000 to its lowest level since December 2020, the BBC reported.

On June 10, official data showed that prices in the US increased faster than expected last month, as rising energy and food costs pushed inflation to the highest level since 1981.

The annual inflation rate rose to 8.6 per cent in May, the Labour Department said, after easing in April.

That confounded hopes that inflation had peaked, and instead put investors on alert that the Federal Reserve may take and more robust action to tackle the issue, BBC reported.

The central bank is due to make its next policy announcement on Wednesday.

Markets currently see an 80 per cent chance that it will raise its main interest rate half a percentage point.