Investing.com– Asian stocks were mixed on Friday as investors turned cautious ahead of key U.S. jobs data that could shape expectations for the Federal Reserve’s interest-rate path, while elevated bond yields and oil prices weighed on risk appetite.
Wall Street had ended slightly higher on Thursday after a sharp rise in Treasury yields eased later in the session.
U.S. stock futures edged higher in Asian trading by 06:41 GMT.
Hang Seng drops 3%, Nikkei lower
Japan’s Nikkei 225 closed 0.9% lower, while the broader TOPIX index slipped 1%.
Hong Kong was the biggest loser among major regional markets, with the Hang Seng Index dropping 3% to an 11-week low around 23,900 points.
The decline came as investors returned from Thursday’s holiday to a sharp rise in global bond yields and renewed concerns over oil supplies.
Technology stocks also faced pressure in Hong Kong. The Hang Seng TECH sub-index traded 2.5% lower.
South Korea’s KOSPI edged up 0.5%, after swinging between gains and losses earlier in the day.
Elsewhere, Australia’s S&P/ASX 200 ended the session 0.8% higher, while Singapore’s Straits Times Index fell 0.6%.
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Mainland Chinese markets remained shut for the National Day Golden Week holiday and are due to reopen on Oct. 8.
India’s markets were also closed on Friday for Mahatma Gandhi Jayanti.
Tokyo core CPI rises 2.7% y-o-y; U.S. jobs data awaited
Data showed that Tokyo’s core consumer price index rose 2.7% year-on-year in September, accelerating from 1.8% in August and exceeding the 2.4% market forecast.
The data came after a summary of the Bank of Japan’s September meeting showed that some policymakers saw a need to accelerate interest-rate hikes as inflation risks mounted.
The BOJ has hiked its policy rate to 1.25%, while investors are weighing the possibility of another increase at its October or December meetings.
The focus now turns to U.S. nonfarm payrolls due later on Friday. Economists expect the economy to have added 89,000 jobs in September, with unemployment seen steady at 4.1%.
Markets are pricing about a 25% probability of a Federal Reserve rate hike in October, down sharply from 69% a week earlier, while a December increase remains fully priced, according to CME FedWatch.
Bond markets remained a key source of volatility. The U.S. 10-year Treasury yield climbed to 5.34% on Thursday, its highest since 2002, before easing to around 5.25% in Asian trading.