By Gina Lee

Investing.com – Asia Pacific stocks were mostly down on Wednesday morning, even as U.S. data boosted Wall Street shares. Investor sentiment also declined due to calls for the U.S. Federal Reserve adopting a more hawkish policy in order to reduce rising inflation.

Japan’s was down 0.43% by 9:26 PM ET (2:26 AM GMT) and South Korea’s fell 0.78%.

Australia saw a drop of 0.73%.

Hong Kong’s was down 0.48%.

China’s edged up 0.18% and the edged up 0.13%. The U.S. listed Chinese stocks rose on Monday as a result of hopes for improved relations between the U.S. and China after Joe Biden (the Chinese president) participated in a virtual summit.

On Tuesday, data showed that the U.S. experienced a 1.7% increase in month-over-month growth. In October, it also saw a 1.7% rise.

However, Fed Bank of St. Louis President for a more hawkish monetary policy highlighted worries about how high inflation could impact central banks’ monetary policies.

Investors now await comments from Fed Vice Chairman Richard Clarida and Fed Bank of San Francisco President Mary Daly at Friday’s Asia Economic Policy Conference.

Biden is also due to select the nominee for the Fed Chairman position, as incumbent Chairman Jerome Powell’s term expires in February 2022. According to reports, the decision will be made in four days with Powell and Fed Governor Lael Brainard in contention.

U.S. Treasuries remain in a downward trend. However, the benchmark 10-year yield remained above 1.6%. A 20-year note auction will also take place at the end of the day.

U.S. Treasury secretary Janet Yellen warned the country that default is possible unless Congress lifts the legal debt limit by December 15. Meanwhile, yields on Treasury bills due to mature at the end 2021 increased.

While rising inflation has not had a significant impact on corporate profits, it is unclear if this will cause a permanent or more lasting effect that requires central banks to adopt sharper monetary policy.

“Going into the end of 2021, we feel like the equity markets should remain strong,” UBS Global Wealth Management managing director Xi Qiao told Bloomberg. However, “we expect more volatility ahead with rising rates” and that inflation and COVID-19 concerns continue to stir anxiety, she added.