By ELAINE KURTENBACH

The Asian market fell on Friday after the worst monthly loss on Wall Street since the start of the pandemic.

Tokyo slipped 2% and the Australian benchmark fell 2.3%. The Shanghai and Hong Kong markets were closed due to public holidays.

The S&P 500 fell 4.8% in September, the first monthly decline since January and the largest since March 2020.

After rising steadily throughout the year, the outbreak of the more contagious delta variant of COVID-19 has destabilized the stock market, skyrocketed long-term bond yields and the Federal Reserve has triggered its support these last few weeks. There are words that there is a possibility to start. For the economy.

A quarterly survey by the Bank of Japan found that Japanese manufacturers’ business confidence has reached its highest level in nearly three years.

According to the results of the Tankan survey published on Friday, the sentiment of large manufacturers rose from 14 to 18. This is the highest level since the end of 2018. Non-manufacturer values ​​increased slightly from 1 to 2.

However, this study and various other studies have found that manufacturers suffer from a shortage of computer chips and other components amidst the supply chain and shipping disruptions that can hamper recovery from a pandemic.

The Nikkei 225 in Tokyo fell 590.83 points to 28,861.83 points and the S & P / ASX 200 was down 2.3% to 7,165.10. The KOSPI index in Seoul fell 1.4% to 3,026.87. Stock prices also fell in Taiwan and Southeast Asia.

The S&P 500 fell 1.2% on Thursday, down 4.8% in the first monthly drop since January, the largest since March 2020, when the outbreak of the virus that disrupted the global economy rocked the market.

The benchmark index is up 14.7% per year.

The S&P 500 lost 51.92 points to 4,307.54. The Dow Jones Industrial Average fell 1.6% to 33,843.92 and the Nasdaq fell 0.4% to 14,448.58. Shares of SMEs have also fallen. The Russell 2000 Index fell 0.9% to 2,204.37.

Bond yields are kept low. Yields on 10-year government bonds, the benchmark for many types of loans, fell from 1.50% late Wednesday to 1.48%. About a week ago it was as low as 1.32%.

All sectors of the S&P 500 ended in the red on Thursday, with technology stocks, banks and a combination of consumer goods and service providers making up most of the recession. Over 90% of index stocks have fallen.

In recent weeks, economic data has shown that highly contagious delta variants are holding back the recovery in consumer spending and the job market.

The Labor Ministry said jobless claims rose for the third week in a row, more than economists expected. The Commerce Department raised its estimate of economic growth for the second quarter to 6.7%. This was slightly above economists’ expectations, but we expect third quarter growth to fall to 5.5%.

Inflation is also a concern. Various companies have warned of the financial implications of rising prices. Sherwin-Williams and Nike are one of many companies warning investors of supply chain issues, rising raw material costs, and labor cost issues.

Investors are trying to determine if these problems are temporary and part of an economic recovery or may last longer than expected. The next business income report may reveal how businesses are tackling these issues.

On Thursday, a bill that funded the U.S. government until Dec. 3 to avoid a partial federal shutdown cleared Congress. However, the controversy between Democrats and Republicans over extending the country’s debt restrictions remains unresolved.

Homebuilders fell sharply after reports that average long-term mortgage rates on mortgages exceeded 3% for the first time since June of this week. Mortgage rates tend to follow the direction of 10-year government bond yields. According to mortgage buyer Freddie Mac, the 30-year average mortgage rate has risen to 3.01%. The average rate last week and a year ago was 2.88%.

Higher mortgage rates can limit the purchasing power of home buyers and lower prices for potential homeowners. LGI Homes was down 5.1% and PulteGroup was down 4.2%.

In another trade on Friday, benchmark U.S. crude fell 23 cents to $ 74.80 a barrel in electronic trading on the New York Mercantile Exchange. It rose 18 cents to $ 75.03 a barrel on Thursday.

Brent crude fell 29 cents to $ 78.02 a barrel.

The dollar was almost stable at 111.28 yen. The euro fell from $ 1.1580 to $ 1.1578.

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Contributed by AP Business Editors Alex Veiga and Damian J. Troise.