Asian markets showed mixed performance on Friday amid a sharp rise in global bond yields and anticipation of the US monthly jobs data, prompting concerns over equity valuations and interest rate hikes.
Asian equities were mixed on Friday as a global bond sell-off gathered pace and investors waited for the latest U.S. monthly jobs report, a reading that could help shape expectations for another Federal Reserve rate increase. Reuters reported that Japanese shares slipped, while gains in South Korea and Australia helped offset weaker trading in Hong Kong, where the benchmark fell to its lowest level since July.
The Nikkei 225 in Tokyo dropped 0.9% to 68,326.72, and Hong Kong’s Hang Seng lost 2.7% to 23,956.32. By contrast, South Korea’s Kospi rose 0.2% to 6,984.96, Australia’s S&P/ASX 200 added 0.4% to 8,651.30, and Taiwan’s Taiex edged higher. Markets in mainland China were shut for a holiday, limiting regional trading volumes.
The pressure on equities has been tied to a sharp rise in government borrowing costs. U.S. Treasury yields steadied early on Friday after the 10-year note touched 5.34% on Thursday, its highest level since 2002, according to Reuters. Analysts have said the 5% level has become a significant psychological marker for investors, and the latest move has revived fears that persistently higher yields will keep squeezing stock valuations by raising financing costs across the economy.
The mood in energy markets was calmer, even as the United States moved additional military assets into the Middle East and President Donald Trump threatened further action against Iran. Brent crude slipped 0.2% to $102.13 a barrel, still far above the roughly $72 level seen in late February before the conflict. On Wall Street, the S&P 500, Dow Jones Industrial Average and Nasdaq Composite all closed slightly higher on Thursday, while U.S. futures inched up in early Friday trade. The dollar eased against the yen, and the euro was little changed.
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