Stock market today: Asian shares sink as central banks crank interest rates still higher

BANGKOK (AP) — Asian shares sank sharply Friday after several central banks around the world cranked interest rates higher in their fight against inflation.

Hong Kong and Tokyo shed nearly 2% and most other regional markets declined. U.S. futures and oil prices also were lower.

Japan reported its inflation rate was higher than expected, adding to expectations the central bank might adjust its policies to reflect upward price pressures, which have pushed the dollar's value against the yen sharply higher. The Bank of Japan has kept its benchmark interest rate at minus 0.1% for a decade as policymakers keep credit cheap to encourage more investment and spending.

The core inflation rate, excluding volatile energy and food prices, was 3.2% in May, above the official 2% target for a 14th straight month, the government reported.

“We think there are signs of inflationary pressure building up on the supply side, but it is certainly not strong enough for the BOJ to bring about immediate tightening,” ING Economics said in a commentary.

The dollar was trading at 143.34 yen, up from 143.10 yen and near its highest level since November. A weaker Japanese yen raises costs for Japanese businesses and consumers given the country's heavy reliance on imports.

Tokyo's Nikkei 225 lost 1.5% to 32,781.54 and the Hang Seng in Hong Kong fell 1.8% to 18,883.80.

In Seoul, the Kospi fell 0.9% to 2,570.10, while Australia's S&P/ASX 200 gave up 1.3% to 7,009.20. Markets in mainland China were closed for a holiday. Shares also fell in Mumbai and Bangkok.

On Thursday, the S&P 500 rose 0.4% to 4,381.89, even though the majority of stocks fell. A rebound for technology stocks helped to overshadow losses elsewhere in the market and keep the benchmark index afloat.

Gains for high-growth stocks...