Asian shares mostly lower as Japan preps massive stimulus

BEIJING – Shares were mostly lower in Asia on Friday after a mixed session on Wall Street, where tech sector losses offset gains in other parts of the market.

Tokyo’s benchmark slipped as the government was preparing about a massive stimulus spending package to help the world’s No. 3 economy cope with inflation. As expected, the Bank of Japan wrapped up a policy meeting by keeping its ultra-lax monetary policy unchanged even as it forecast higher inflation.

The Nikkei 225 index lost 0.9% to 27,105.20 while the Hang Seng in Hong Kong sank 3.2% to 14,934.69. The Shanghai Composite index shed 0.9% to 2,938.77.

The Kospi in Seoul declined 0.8% to 2,269.80. Australia's S&P/ASX 200 dropped 0.9% to 6,785.70.

The economic stimulus package due for approval Friday includes government funding of about 29 trillion yen ($200 billion) in subsidies and other measures to help soften the burden of costs from rising utility rates and food prices. It is also designed to help shore up support for Prime Minister Fumio Kishida, whose popularity has taken a beating due to a scandal over ties between the ruling Liberal Democratic Party and the South Korea-based Unification church.

Thursday on Wall Street, the S&P 500 fell 0.6%, with about 44% of stocks within the benchmark index losing ground. It closed at 3,807.30.

The tech-heavy Nasdaq fell 1.6% to 10,792.67, while the Dow Jones Industrial Average rose 0.6% to 32,033.28.

Smaller company stocks held up better than the broader market. The Russell 2000 index added 0.1% to 1,806.32.

Facebook's parent company, Meta Platforms, plummeted 24.6% for the biggest drop in the S&P 500 after reporting a second straight quarter of revenue decline amid falling advertising sales and stiff competition from TikTok. It joined other tech and communications stocks, such as Google's parent company, Alphabet, and Microsoft, in reporting weak results and worrisome forecasts over advertising demand. Alphabet fell 2.9% and Microsoft slid 2%.

Amazon slid 19% in after-hours trading after the retail giant issued an estimate for sales in the last quarter of the year came in well below analysts' forecasts. The stock fell 4.1% in regular trading before the release of its latest quarterly results.

Construction equipment maker Caterpillar jumped 7.7% after it handily beat analysts’ third-quarter profit forecasts. The big gain helped boost the 30-company Dow.

Another pullback in long-term Treasury yields helped support stocks in companies that weren't reporting quarterly results. The yield on the 10-year Treasury, which influences mortgage rates, fell to 3.91% from 4.01% late Wednesday. The two-year yield fell to 4.30% from 4.42%.

Excluding the Nasdaq, the major indexes are on pace for weekly gains. And the S&P 500 remains solidly on track to end October in the green.

Markets got some encouraging economic news Thursday as the government reported the U.S. economy returned to growth last quarter, expanding 2.6%. That marks a turnaround after the economy contracted during the first half of the year.

The economy has been under pressure from stubbornly hot inflation and the Federal Reserve's efforts to raise interest rates in order to cool prices. The central bank is trying to slow economic growth through rate increases, but the strategy risks going too far and brining on a recession.

The rising interest rates have made borrowing more difficult, particularly with mortgage rates. Average long-term U.S. mortgage rates topped 7% for the first time in more than two decades this week.

Central banks around the world also have been raising interest rates in an effort to tame inflation. The European Central Bank piled on another outsized interest rate hike on Thursday. Markets in Europe were mixed.

Wall Street has more earnings to review Friday, including Exxon Mobil, Chevron and Charter Communications.

Meanwhile, S&P Dow Jones Indices said Thursday that insurer Arch Capital Group will replace Twitter in the S&P 500 index before the opening of trading on Tuesday. The move comes ahead of Elon Musk's acquisition of Twitter in a transaction expected to close Friday.

In other trading, the dollar fell to 146.20 yen from 136.31 late Thursday. The euro rose to 99.79 cents from 99.66 cents.

Benchmark U.S. crude oil lost $1.05 to $88.03 per barrel in electronic trading on the New York Mercantile Exchange. It gained $1.17 on Thursday to $99.08 per barrel. Brent crude oil gave up 90 cents to $94.14 per barrel.

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AP Business Writers Damian J. Troise and Alex Veiga contributed.