Stocks slip as growth risks sap confidence; bonds, dollar in demand

People walk past a screen displaying the Hang Seng stock index at Central district, in Hong Kong, China July 19, 2022. REUTERS/Lam Yik

TOKYO, July 25 (Reuters) – Asian stocks lost ground on Monday, retreating from over three-week highs as worries about a global economic downturn sapped investors’ risk appetite.

Bond yields eased amid bets that a U.S. recession would slow the Federal Reserve’s aggressive tightening campaign, with markets looking for policy clues from its two-day Federal Open Market Committee meeting which begins on Tuesday.

At the same time, the dollar built on its recovery from a 2 1/2-week low against major peers, supported by demand for the U.S. currency as a safe haven.

“Risk markets are obviously priced for some kind of slowdown, but are they priced for an outright recession? I would argue no,”…