Asian shares mostly fall after US stocks retreat; gold tops $4,000 an ounce

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Shares were mostly lower in Asia on Wednesday after US stocks sank to their first loss in eight days, losing momentum after the price of gold topped $4,000 per ounce for the first time.

The price of gold was up $25.40 at $4,029.60 an ounce. US futures and oil prices also advanced.

The Japanese yen fell sharply against the dollar on expectations that Sanae Takaichi, the conservative lawmaker likely to become the next prime minister, will push to keep interest rates low.

The dollar rose to 152.53 yen from 151.90 yen, while the euro slipped to $1.1621 from $1.1659.

Tokyo's benchmark Nikkei 225 edged 0.1 per cent higher to 48,002.18.

Takaichi, who the ruling Liberal Democrats chose as their leader last weekend, is expected to increase spending and to advocate for easier credit, possibly slowing efforts by the Bank of Japan to raise its key interest rate. It has remained near zero for years, even as inflation has exceeded its target of about 2 per cent, outpacing wage increases.

While the economic case for tighter monetary policy remains intact, we suspect that the Bank of Japan will use the pressure by Japan's incoming government as an opportunity to delay rate hikes until January, Marcel Thieliant of Capital Economics said in a commentary.

Lawmakers in Japan's lower house of parliament are due to elect a successor to Prime Minister Shigeru Ishiba later this month. The Liberal Democrats hold the most seats despite not having an outright majority, so Takaishi is expected to become the country's first female prime minister.

Elsewhere in Asia, Hong Kong's Hang Seng dropped 0.9 per cent to 26,719.68 and the S&P/ASX 200 edged 0.1 per cent lower to 8,945.10.

Markets in mainland China and South Korea were closed for holidays.

In Taiwan, the Taiex lost 1 per cent.

On Tuesday, the S&P 500 fell 0.4 per cent from its all-time high, closing at 6,714.59. The Dow Jones Industrial Average lost 0.2 per cent to 46,602.98, and the Nasdaq composite gave up 0.7 per cent to 22,788.36.

Tesla was the heaviest weight on the market and dropped 4.4 per cent after unveiling cheaper versions of two of its electric car models. The stock gave back most of its leap from the prior day, when speculation and hype built after Tesla hinted at a coming product announcement.

Oracle also helped drag the market lower. It fell 2.5 per cent after a news report suggested it's making thin profit margins on a key line of business related to artificial-intelligence technology.

US shares have rushed higher in recent months on hopes that the economy will remain resilient and that the Federal Reserve will continue to cut interest rates.

The rapid rise of artificial intelligence has helped fan buying enthusiasm, but also is raising worries that share prices may have shot too high.

On Tuesday, Dell climbed 3.5 per cent after executives talked up the company's opportunity for growth because of AI at an investment conference. Advanced Micro Devices rallied 3.8 per cent to add to its surge from Monday, when it announced a deal where OpenAI will use its chips to power AI infrastructure.

IBM rose 1.5 per cent after announcing a partnership that will integrate Anthropic's Claude AI chatbot into some of its software products.

Much is riding on expectations that the AI investment boom will pay off by making the global economy more productive and driving more growth. Without that increased efficiency, inflation could push higher due to upward pressure coming from the mountains of debt that the US and other governments worldwide are building.

Investors have traditionally seen gold as a hedge against high inflation. Its price has soared more than 50 per cent this year because of governments' huge debt loads, political uncertainties and anticipation that the Fed will cut interest rates.

Also early Wednesday, US benchmark crude oil was up 52 cents at $62.25 per barrel. Brent crude, the international standard, rose 50 cents to $65.95 per barrel.