By Gina Lee

– Asia Pacific stocks were mixed on Thursday morning, with U.S. equivalents reversing a recent rally. Concerns about the risks posed by the new omicron COVID-19 variant continue to mount, and U.S. Federal Reserve Chairman Jerome Powell reiterated his stance of wrapping up asset tapering earlier than planned.

Japan’s Nikkei 225 225 was down 0.44% by 9:01 PM ET (2:01 AM GMT) while South Korea’s KOSPI rose 0.81%.

In Australia, the ASX 200 was down 0.34%.

Hong Kong’s Hang Seng Index was up 0.35%.

China’s Shanghai Composite was up 0.23% while the Shenzhen Component edged down 0.20%. The country is reportedly planning to ban companies from going public on foreign stock markets through variable interest entities, with the China Securities Regulatory Commission denying the report.

U.S. shares were also on a downward trend, with the S&P 500 recording its worst two-day selloff since October 2020 and the tech-heavy Nasdaq 100 also underperforming. U.S. Treasuries also retreated from an earlier rally that took the 30-year yield to its lowest level since January 2021.

The U.S. also confirmed its first case of the omicron COVID-19 variant, which will pose a fresh challenge to the economic recovery. However, Powell reiterated that the Fed should consider quickening the pace of asset tapering as inflation remains high.

The prospect of tighter monetary policy from central banks, alongside the risk posed by omicron to the global economic recovery, increased expectations for volatility in financial markets to continue through the month.

“The omicron variant is the number one uncertainty facing the U.S. economic outlook,” Commonwealth Bank of Australia strategist Kim Mundy said in a note.

The number of COVID-19 cases in South Africa almost doubled, while the U.K., Switzerland, and Brazil reported cases of the omicron variant. Although World Health Organization chief scientist Soumya Swaminathan said vaccines will likely protect against severe cases of the variant, questions remain.

On the data front, the U.S. economy grew at a modest to moderate pace through mid-November 2021, while price hikes were widespread amid supply-chain disruptions and labor shortages, the Fed said in its Beige Book survey released on Wednesday.

The U.S. initial jobless claims figure will be released later today, with the job report, including non-farm payrolls, following a day later.