Asian shares mixed, with most markets shut

BANGKOK

Asian shares were mixed yesterday after Wall Street capped its eighth straight winning week with a quiet finish following reports showing inflation on the way down and the economy potentially on the way up.

Tokyo's Nikkei 225 added 0.2 percent and the Taiex in Taiwan gained 0.1 percent. Bangkok's SET was up 0.2 percent. The Shanghai Composite index lost 0.3 percent to 2,905.79.

Most markets in the region and beyond were closed for the Christmas holiday.

With its eight straight weekly gains, the S&P 500 is in the midst of its longest winning streak since 2017.

Wall Street’s focus was squarely on a suite of economic reports released on Dec. 22 that led to some swings in Treasury yields.

The measure of inflation the Federal Reserve prefers to use slowed by more than economists expected, down to 2.6 percent in November from 2.9 percent a month earlier. It echoed other inflation reports for November released earlier in the month.

The Federal Reserve is walking a tightrope, trying to slow the economy enough through high interest rates to cool inflation, but not so much that it tips into a recession. A stronger-than-expected economy could complicate the balancing act.

Falling yields have been a primary reason the stock market has charged roughly 15% higher since late October.

Not only do they boost the economy by encouraging borrowing, they also relax the pressure on the financial system and goose prices for investments. They’ve been easing on hopes that inflation has cooled enough for the Federal Reserve to cut interest rates through 2024.

Traders are largely betting the Federal Reserve will cut its main interest rate by at least 1.50 percentage points by the end of next year, according to data from CME Group.

The federal funds rate is currently sitting within a range of 5.25 percent to 5.5 percent at its highest level in more than two decades.