Asia-Pacific stocks slide as major indexes in Japan and Hong Kong fall around 2% each

SINGAPORE — Shares in Asia-Pacific fell in Friday morning trade as investors watch for market reaction to overnight remarks from U.S. Federal Reserve Chairman Jerome Powell.

Hong Kong’s Hang Seng index led losses among the region’s major markets, falling 2.19% in early trade as shares of Chinese tech giants Tencent and Alibaba dropped 3.79% and 4.89%, respectively.

Mainland Chinese stocks also declined, with the Shanghai composite down 0.62% while the Shenzhen component dipped 0.752%.

The Nikkei 225 in Japan also saw sizable losses, declining 1.93% as shares of conglomerate SoftBank Group dropped more than 3%. The Topix index shed 1.45%. South Korea’s Kospi traded 0.97% lower.

Australian stocks declined as the S&P/ASX 200 dipped 1.6%.

MSCI’s broadest index of Asia-Pacific shares outside Japan traded 1.39% lower.

“I would say 50 basis points will be on the table for the May meeting,” Powell said. Following those comments, expectations for a 50 basis point move in May rose to 97.6%, according to the CME Group’s FedWatch Tool.

“The long of the short of it is: rates are going to go up, the Fed wants to keep pushing them up a lot and they will keep doing so until something breaks. The question is: what will break and when?” said Michael Every, global strategist at Rabobank.

U.S. Treasury yields also jumped on the back of Powell’s comments. The yield on the benchmark 10-year Treasury note, which started the year near 1.5%, last stood at 2.9425%.

Stocks on Wall Street fell overnight stateside, with the S&P 500 slipping about 1.48% to 4,393.66. The Dow Jones Industrial Average shed 368.03 points, or 1.05%, to 34,792.76. The tech-heavy Nasdaq Composite lagged, dropping 2.07% to 13,174.65.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 100.578 — once again above the 100 level that it fell below briefly earlier this week.

The Japanese yen traded at 128.54 per dollar, still weaker as compared with levels below 126 seen last week against the greenback. The Australian dollar was at $0.7361 after a recent drop from above $0.744.

Oil prices were lower in the morning of Asia trading hours, with international benchmark Brent crude futures down 0.8% to $107.46 per barrel. U.S. crude futures shed 0.78% to $102.98 per barrel.

— CNBC’s Jeff Cox contributed to this report.