By Gina Lee

Investing.com – Asia Pacific stocks were mostly down on Monday morning, with Western countries slapping harsher sanctions on Russia in response to the latter’s invasion of Ukraine.

Japan’s was down 0.36% by 9:28 PM ET (2:28 AM GMT). Japan earlier in the day released , including  month-on-month and year-on-year for January 2022.

South Korea’s was up 0.21%.

Australia saw a gain of 0.48%. Australia released data earlier today, including month-0nmonth January. It will announce its policy decision Tuesday.

New Zealand released its February 2012 report across the Tasman Sea.

Hong Kong’s fell 0.92%.

China’s edged down 0.12% and the fell 0.71%.

The most recent sanctions will ban some Russian lenders from using the global SWIFT messaging system, while doubts are rising as to the Central Bank of the Russian Federation (Bank of Russia)’s ability to keep the Russian financial system and the rouble under control.

International banking may be affected by the SWIFT exclusion. Accordingly to Credit Suisse (SIX:) Group AG strategist Zoltan Pozsar.

Already, the conflict has driven up prices for resources like wheat, oil and metals. Investors are now waiting to see how this will impact the U.S. Federal Reserve’s plans for interest rate hikes starting in March 2022.

“Markets will have to digest once again the next stage of this crisis,” Medley Global Advisors global macro strategist Ben Emons told Bloomberg. He said that sanctions can have an effect on market liquidity.

Russian and Ukrainian officials will meet near the Belarusian border. However, Volodymyr Zeleskiy, Ukrainian President is skeptical.

As fears about a collapse of the rouble increased, Russia saw long lines at cash machines throughout the country. S&P Global (NYSE:) Ratings also slashed Russian bonds to below investment grade on Friday.

Companies are also taking action, with BP (NYSE:) Plc exiting its shareholding in Russia’s Rosneft PJSC and Norway planning to remove Russian assets from its $1.3 trillion sovereign wealth fund.

The conflict is “likely to boost energy prices significantly, resulting in immediate inflationary effects and a large drag on global growth,” Federated Hermes (NYSE:) senior economist Silvia Dall’Angelo said in a note.

“It’s fair to say that the crisis increases the room for central banks’ policy mistakes,” the note added.

Jerome Powell, Fed Chairman will give testimony before Congress Wednesday and Friday. While the Federal Reserve will make its decision regarding policy on Wednesday night, the European Central Bank will issue the information a day later.

U.S. President Joe Biden is scheduled to deliver the State of the Union address Tuesday. The U.S. job report including the upcoming Friday will follow on Friday.