A currency trader passes by the screens showing the foreign exchange rates at the KEB Hana Bank's foreign exchange dealing room in Seoul, South Korea, May 30, 2023. Asian shares were mixed in directionless trading following a U.S. holiday Tuesday, as optimism about a deal on the U.S. debt mixed with worries about the regional economy. The Nikkei 225, a benchmark in Japan, rose 0.3% to 31,328. Australia's S&P ASX 200 edged down 0.1% to 7,209. Kospi, the stock of South Korea's Kospi, jumped 1.0% to 2,584. At 18,553 on Friday, the Hong Kong Hang Seng was up less than 0.1%. The Shanghai Composite fell less than 0.1% to 3,221. Investors are concerned about a possible second wave of COVID-19 cases in China, but the economic impact is expected to be more limited than the previous pandemic wave.
China's recovery from virus-related disruptions in the past several years appears to be faltering, leading to worries about the regional economy.
To say China's economic opening has been a disappointment could be an understatement, especially as reflected in local stocks that are now on the cusp of a bear market, Stephen Innes of SPI Asset Management said in a commentary.
World markets rose mostly after President Joe Biden and House Speaker Kevin McCarthy reached an agreement on a deal to raise the U.S. national debt ceiling. Now Biden and McCarthy are working to gather votes needed to secure congressional approval in time to avert a default.
There are other worries, including the possibility of the U.S. defaulting on its debt. The Fed's key inflation measure, a key measure of inflation, ticked higher than economists expected in April. The central bank has been aggressively lowering interest rates since 2022, but recently announced that it will likely forgo a rate hike when it meets in mid-June.
Markets are closely following the U.S. consumer confidence data set to be released later in the day.
In trading, U.S. benchmark crude dropped 25 cents to $72.42 in electronic trading on the New York Mercantile Exchange. The U.S. dollar edged up to 140.44 Japanese yen from 140.38, marking the biggest gain since the start of the year. The euro was down $1.0700, down from $1.0711.