Inflation and interest rate increases are causing losses on the Asian stock exchanges

Tokyo Fears of a US recession following aggressive rate hikes by the US Federal Reserve drove investors in Asia out of the markets on Tuesday. “In the US, interest rates are going to rise faster and faster than Wall Street expected,” said James Rosenberg, a consultant at Ord Minnett in Sydney. “This will likely have a dual impact of lowering earnings forecasts and further dropping the price earnings ratio.”

Due to the ongoing price pressure, a rate hike of 0.75 percentage points in July is considered certain. “Higher inflation, slower growth and higher interest rates are a bad combination for stocks,” the ANZ analysts wrote. The Nikkei index, which comprises 225 stocks, was two percent lower at 26,443 points. The broader Topix index fell 1.6 percent to 1872 points.