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Asian shares mixed after central bankers say interest rates must stay high

Asian stock markets were mixed Thursday after leaders of major central banks said they need to keep interest rates high to fight persistent inflation despite fears that might tip the global economy into recession.

Shanghai, Hong Kong and Seoul retreated while Tokyo and Sydney advanced. Oil prices declined.

U.S., European and Japanese central bankers meeting Wednesday in Portugal said with hiring still strong, they have yet to extinguish upward pressure on prices. “Policy hasn’t been restrictive enough for long enough,” said Federal Reserve Chair Jerome Powell.

“The end of hiking interest rates is not in sight yet,” Carl B. Weinberg of High-Frequency Economics said in a report.

The Shanghai Composite Index lost 0.1% to 3,185.83 while the Nikkei 225 in Tokyo gained 0.4% to 33,308.65. The Hang Seng in Hong Kong sank 1.4% to 18,906.91.

The Kospi in Seoul gave up 0.2% to 2,558.98 while Sydney's S&P-ASX 200 advanced less than 0.1% to 7,197.60.

New Zealand and Bangkok advanced. Markets in India and Singapore were closed for holidays.

On Wall Street, the benchmark S&P 500 edged down less than 0.1% to 4,376.86.

The Dow Jones Industrial Average slipped 0.2% to 33,852.66. The Nasdaq composite rose 0.3% to 13,591.75.

General Mills sank 5.2% after the maker of Cheerios and Haagen-Dazs reported weaker revenue for the latest quarter than analysts expected.

Other food companies also fell, including drops of 4% for Hershey, 3.7% for J.M. Smucker and 3.5% for Conagra Brands.

AeroVironment, maker of unmanned aircraft, tactical missile systems and other equipment used by the U.S. military and in Ukraine, rose 4.9% after reporting stronger profit and revenue than expected.

Investors expect at least a brief recession this year after the Fed and central banks in Europe and Asia raised interest rates. But hiring and consumer spending have stayed unexpectedly strong, prompting suggestions a recession might be avoided.

The Fed has said it expects to raise rates one or two more times this year, while the European Central Bank and others have sounded even more aggressive.

Strong reports on U.S. consumer confidence, sales of new homes and other areas of the economy on Tuesday helped lead to a 1.1% rally for the S&P 500. This month, the S&P 500 reached its highest level since April 2022.

In energy markets, benchmark U.S. crude lost 35 cents to $69.21 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.86 on Wednesday to $69.56. Brent crude, the price basis for international oil trading, shed 42 cents to $73.82 per barrel in London. It gained $1.77 the previous session to $74.03.

The dollar rose to 144.57 yen from Wednesday's 144.32 yen. The euro fell to $1.0886 from $1.0922.

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