Portugal Colonial - Asian markets fall as investors eye US Fed outlook

With the Jackson Hole meeting of central bankers this week, focus is on what US Federal Reserve chief Jerome Powell will say about plans to tackle high prices -- with many fearing officials could send the economy into recession in its battle to rein in inflation.

The Fed "is probably going to use this weekend to reiterate the fact that rates have more room to climb because they really want to bring inflation down," Kelvin Tay, Asia-Pacific chief investment officer at UBS Global Wealth Management, told Bloomberg Television.

Central banks face a delicate balancing act between battling inflation, with Russia's war in Ukraine sending energy prices soaring, and avoiding recession.

"With European gas prices continuing to trade at record highs, investor anxiety is growing that a combination of central banks raising rates and higher energy prices will tip the global economy into a long recession," said CMC Markets analyst Michael Hewson.

Wall Street ended mostly lower, and key markets in Asia followed suit.

Tokyo started in positive territory but the upward drive was short-lived.

"Lingering worries over US rate hike plans weighed on the market,"said Hiromi Kanamaru, senior strategist at Daiwa Securities.

Tokyo closed down 0.5 percent and Hong Kong, Shanghai and Taipei also fell while Seoul, Sydney and Wellington rose.

The decline continued in Europe, with London down 0.4 percent in opening deals while Frankfurt and Paris were both off 0.2 percent.

"Asian markets have turned risk-averse ahead of the Jackson Hole meeting," Natixis economist Gary Ng said.

"Hong Kong and China stock markets continue to perform weaker than Asian peers as they face higher uncertainties."

- Euro hits new 20-year low -

The euro tumbled to $0.9901 -- a new two-decade low -- on Tuesday but later clawed back losses as the greenback was hit by poor US economic data.

The dollar had strengthened this week ahead of a speech Friday by Powell, as markets speculate that the Fed will continue to tighten its monetary policy.

Higher interest rates boost the American currency as they make dollar-denominated debt more attractive to investors.

But the euro also has been weighed down by a gloomy outlook for the eurozone economy with energy prices soaring.

- Key figures at around 0715 GMT -

Tokyo - Nikkei 225: DOWN 0.5 percent at 28,313.47 (close)

Hong Kong - Hang Seng Index: DOWN 1.1 percent at 19,292.77

Shanghai - Composite: DOWN 1.9 percent at 3,215.20 (close)

London - FTSE 100: DOWN 0.4 percent at 7,458.65

Euro/dollar: UP at 0.9951 from 0.9949

Pound/dollar: UP at 1.1813 from 1.1804

Euro/pound: DOWN at 84.23 pence from 84.29 pence

Dollar/yen: DOWN at 136.79 yen from 136.92 yen

West Texas Intermediate: UP 0.2 percent at $93.90 per barrel

Brent North Sea crude: UP 0.6 percent at $100.25

New York - Dow: DOWN 0.5 percent at 32,909.59 points (close)

L.E.Campos--PC