Asian markets drop on economy worries, yen rallies

HONG KONG, Sept 11 (AFP): Equities slipped Wednesday following a mixed day on Wall Street, as worries about the world's top two economies offset optimism that the Federal Reserve will start cutting interest rates next week.
Meanwhile, the yen hit its highest level in nine months after a Bank of Japan official said decision-makers would stick to their tightening plan if the economy and inflation perform as expected.
Nervous traders were also jockeying for position ahead of key US inflation data that could play a role in the central bank's decision making next week, while oil edged up after Tuesday's plunge sparked by demand fears.
Another round of sub-par US jobs data last week revived worries that the world's top economy was slowing more than expected and could be on course for a recession.
They came a month after a stock rout caused by an equally bad reading on the labour market and added to debate about whether the Fed had waited too long to cut rates owing to its focus on bringing inflation down.
Investor uncertainty over the United States is compounded by the ongoing struggles of China's economy, as leaders there try to kickstart growth in the face of a crisis in the huge property sector, tepid consumer activity and soaring youth unemployment.
The long-running troubles in the economy, and recent crackdowns on various sector's by the government, have hammered the mainland and Hong Kong stock markets, which have underperformed in recent years.
And they fell again Wednesday along with most other markets in the region.
Tokyo, Sydney, Seoul, Wellington and Manila were also in the red, though Singapore, Taipei and Jakarta edged up slightly.
Focus now is on the release of the US consumer price index later in the day, hoping for an insight into the Fed's next move when it concludes its next meeting on September 18 and what it could mean for the economy.
"Investors have turned their gaze toward the burning question," said independent analyst Stephen Innes.
"Soft landing or full-blown recession? Will the Federal Reserve's easing cycle be a smooth, controlled descent, or are we heading for a fast-and-furious, panic-driven acceleration?
"There's still a school of thought that (Fed boss Jerome) Powell might reach into his monetary hat and pull out a surprise 50-basis-point cut. The call might be closer than market odds are pricing, and Powell might be the wildcard that flips the entire narrative.
"Buckle up because this high-stakes game isn't over yet.