Asia extended losses across world markets on Friday after the European Central Bank laid the groundwork to join others in a programme of interest rate hikes, while attention turns to the release of key US inflation data.
After a largely positive start to the week, investors tracked their US and European colleagues in selling up as they contemplate higher borrowing costs and surging prices, which many fear could lead to a recession.
Adding to the unease was news that officials in China had once again locked down millions of people to test them owing to another flare-up in cases, dealing a blow to hopes for an economic reopening.
Still, the move helped push down oil prices -- a key driver of global inflation -- owing to concerns about the impact on demand.
With prices rising at a decades-high pace, central banks have been forced to withdraw the vast financial support measures put in place to combat the impact of the pandemic and helped fuel a rally across markets to record or multi-year highs.
The ECB became the latest to join the tightening campaign, announcing Thursday the end of its bond-buying programme and signalling it will hike rates several times this year.
It also sharply upgraded its inflation forecasts for this year and next while lowering the economic growth outlook.
Focus now turns to the release of US consumer price figures later Friday, with a strong reading likely to give the Federal Reserve more room to be aggressive.
