Asian shares traded mixed Friday as a global sell-off in government bonds intensified and investors awaited the release of the latest US jobs report.
Oil prices were largely steady as the US sent another aircraft carrier and additional troops to the Middle East, while President Donald Trump warned of possible further escalation with Iran.
Japan's Nikkei 225 fell 0.9% to 68,326.72, while South Korea's Kospi gained 0.2% to 6,984.96. Hong Kong's Hang Seng dropped 2.7% to 23,956.32, its lowest level since July.
Australia's S&P/ASX 200 rose 0.4% to 8,651.30, while Taiwan's Taiex gained 0.2%. Mainland Chinese markets were closed for a holiday.
US futures edged higher after Treasury yields steadied early Friday.
The yield on the 10-year US Treasury stood at about 5.25%, after climbing to 5.34% Thursday, its highest level since 2002. It crossed 5% last month as investors demanded higher returns amid inflation concerns linked to the global energy shock from the Iran war and rising US government debt.
David Clewell, a portfolio manager at T. Rowe Price, described the 5% yield level as an “important psychological threshold” for investors.
Clewell said strong US economic growth could create a “credible” possibility of the 10-year Treasury yield rising toward 5.5% to 6%. Higher bond yields can put pressure on stock markets by increasing borrowing costs and reducing the relative appeal of stocks.
European benchmark stock indexes fell sharply Thursday as government bond yields climbed. On Wall Street, the S&P 500 gained 0.2%, the Dow Jones Industrial Average rose less than 0.1% and the Nasdaq composite added less than 0.1%.
Investors were closely watching the September US jobs report due Friday for clues about the Federal Reserve's interest-rate policy. The report could provide further indications about the possibility of an October rate hike after the Fed raised rates in September for the first time in three years.
Oil prices edged lower early Friday as uncertainty continued over the Middle East and the possibility of easing tensions between the US and Iran.
A US official said Thursday that the US military was sending thousands of additional troops to the Middle East aboard a group of ships that includes a third aircraft carrier.
The move came after Trump said Wednesday that the US could “blow them up” or reach a deal, referring to Iran.
Brent crude, the international benchmark, fell 0.2% to $102.13 a barrel after rising Thursday. The price remains well above the roughly $72-per-barrel level recorded in late February before the war.
The US dollar fell to 157.91 Japanese yen from 158.09 yen. The euro rose to $1.1250 from $1.1244.