(Bloomberg) -- Asian stocks followed Wall Street lower Monday as the Federal Reserve's resolve to keep raising rates and a wave of Covid in Beijing damped sentiment for riskier assets. Shares dropped in Japan, South Korea and Australia. Equity futures pointed to a slight decline in Hong Kong and US contracts were marginally higher. The S&P 500 and the tech-heavy Nasdaq 100 closed lower for a third day on Friday. The yen was supported by a report that the Japanese prime minister may consider allowing more flexibility in the monetary regime, which has kept the nation's interest rates at rock-bottom levels.The risk of higher interest rates pushing the US into recession in 2023 is casting a pall over trading that's winding down into year end. A surge of Covid infections in China continued to weigh on sentiment, but investors may get a relief after China's top leaders said they will focus on boosting the economy next year, hinting at business-friendly policies, further support for the property market while likely scaling back fiscal stimulus.Yields on US Treasuries slightly climbed, with the policy-sensitive two-year Treasury at around 4.2%. Government bond yields were little changed in Australia and New Zealand on Monday.Investors had cheered softer-than-expected US inflation data last week but that euphoria faded as Fed officials hammered home the message that rates would go higher for longer until they're confident inflation has been subdued. 'We're done for the end of the year in terms of waiting for an amazing rally,' Sylvia Jablonski, chief investment officer at Defiance ETFs, said on Bloomberg Radio. However, 'the market will look through the expectations of a future recession at some point and come back in because equities are starting to look cheaper and cheaper as we go along here. 'In commodities, oil climbed on China's pledge to revive consumption and move by the US to refill its strategic crude reserves. Gold was little changed.China loan prime rates, TuesdayBank of Japan interest rate decision, TuesdayUS housing starts, TuesdayEIA Crude Oil Inventory Report, WednesdayUS existing home sales, US Conference Board consumer confidence, WednesdayUS GDP, initial jobless claims, US Conf. The S&P 500 fell 1.1% on FridayNasdaq 100 futures rose 0.1%.