Fed Hawkishness Weighs on Asia Equities as Tech Selloff Continues

Federal Reserve officials have offered mixed signals on interest rates as equity markets across Asia came under renewed pressure. Japanese and South Korean stocks fell, dragged down by a tech and semiconductor selloff. The Nikkei dropped, while the KOSPI extended losses to around 4.5%.

The Federal Reserve's hawkish tone was highlighted by Governor Lisa Cook, who said she is ready to support a rate hike if inflation does not ease. She warned that price stability risks now outweigh those facing the labour market and that the Fed is running low on room to keep waiting for disinflation to return.

San Francisco Fed President Mary Daly was more measured in her tone, saying she was 'completely supportive' of the decision to hold rates steady last week but wants more data before its September meeting. Daly said she is prepared to see the Fed act aggressively if inflation momentum shows signs of rebuilding.