By Gina Lee

Investing.com – Asia Pacific stocks were mostly down on Monday morning. The U.S. Federal Reserve is widely anticipated to raise interest rates at its most recent meeting, despite the fact that there are still inflation risks due to disruptions in commodity supply.

Japan’s gained 0.57% by 10:37 PM ET (2:37 AM GMT) while South Korea’s fell 0.96%.

The Australian dollar rose 1.13%.

Hong Kong’s slid 3.16%. China’s fell 0.78% and the was down 0.71%.

The Nasdaq Golden Dragon China Index sank 10% during the previous week, which dampened the mood in Hong Kong alongside the persistently high number of cases in the city’s fifth wave of COVID-19. China has also been dealing with an epidemic, which forced Shenzhen’s southern region to lock down.

Chinese data including the, the., and. is due Tuesday.

Global shares eased a selloff driven by Russia’s invasion of Ukraine on Feb. 24. continue, with senior U.S. and China officials to meet on Monday for discussions.

Russian missiles struck an area of western Ukraine that was being used for military training. The U.S. claimed that Russia requested military equipment from China. Russia has lost access to nearly half of its foreign reserves and it is unclear if Russia will be able to continue servicing its international debt.

U.S. Treasuries showed a continuing downward trend with the U.S. five-year yield at 2%. This is the highest level since May 2019. This and the 12% fall in global stocks over this year continue to raise concerns that tightening of monetary policy as well as rising energy, grain and metal prices could hinder economic recovery.

“We are experiencing extraordinary volatility in global equities compounded by wavering market sentiment, and the risk of recession intensifies on spiraling commodity prices,” Federated Hermes (NYSE:) portfolio manager for global equities Louise Dudley said in a note.

“We expect ongoing swings in the short term as geopolitical uncertainty over Russian crude persists.”

Investors now await the Fed’s policy decision, due to be handed down on Wednesday. However, the central bank “is really stuck between the real economy and the financial economy,” Bain & Co. global head of macro research Karen Harris told Bloomberg.

“You have mainstream struggling with inflation, that’s why we are set to see these rises coming in March. We are not trying to poke the financial sector. Either path is deflationary, recessionary.”

It will announce its policy decision Thursday. The conference that day features Philip Lane, Chief Economist and Ignazio Visco from the Governing Board, Christine Lagarde (Executive Board member), Philip Lane, member of the Executive Board, Isabel Schnabel, President of European Central Bank, and Isabel Schnabel (Executive board member).

Asia Pacific: The Reserve Bank of Australia (RA) will release on Tuesday the while the will issue its policy decision Friday.