Share prices across the Asia-Pacific fell on Friday, pulled down by volatility in bond and currency markets as investors awaited a closely watched US jobs report, while oil held at high levels against a backdrop of ongoing military activity in the Gulf.
Trading in Hong Kong saw the benchmark Hang Seng Index shed around 513 points at the open, a drop of roughly 2.09 percent that brought the gauge down to 24,099. Losses of 141 points, or 1.7 percent, left the China enterprises index at 8,078, and a separate 76-point retreat of 1.81 percent pushed the tech index down to 4,176.
Overnight trading placed the 10-year US Treasury note at the centre of renewed turbulence, with its yield climbing to 5.34 percent — a level not reached since 2002 — after the instrument recorded its steepest quarterly advance in three decades. Pulling back from earlier gains, the yield held at 5.2512 percent across Asian trading.
Unease in French debt markets pushed the yield gap between Paris and Berlin past the 140-basis-point threshold — a spread last recorded in 2012 — putting downward pressure on European stocks and trimming value from the euro. At its low point of US$1.1215 — a rate last seen in May 2025 — the euro gave up ground not only against the dollar but against the yen and Swiss franc as well.
Trading across other parts of the region began in negative territory, as Chinese exchanges remained shut through Wednesday for the National Day Golden Week observance. Trading in Tokyo saw the Nikkei shed 643 points — a drop of 0.93 per cent — with the index touching 68,313 at the open and sliding to 585 points below its previous close at one point before the midday break.
Trading in Seoul got off to a weak start, with the Kospi shedding 33 points — equivalent to a 0.47 per cent decline — to touch 6,938 at the open, though the index clawed back ground and was sitting 12 points above that level at one point during the morning session.
The US nonfarm payrolls report, scheduled for release later that day, drew broad attention from market watchers. Analyst projections pointed to roughly 90,000 new positions added to payrolls in September, with the jobless rate expected to hold at 4.1 percent.
Upcoming wage figures drew attention in the context of ISM survey data that flagged a rise in prices paid, layering onto broader cost pressures already in play. Pepperstone's head of research, Chris Weston, noted that the Federal Reserve's present focus on inflation meant a robust payroll reading could register with amplified force across US interest rates, Treasuries, and the dollar, even while risk assets had, to that point, absorbed the climb in real yields and long-end nominal Treasury yields without apparent disruption.
Market pricing for an October rate rise retreated to around 25 percent, down from nearly 69 percent a week earlier, after two senior policymakers each indicated, in notably direct terms, that they would prefer to assess further economic data before endorsing any additional tightening. Rate markets continued to price in a rate increase for December.
Dovish signals from Fed policymakers pushed two-year Treasury prices higher through the overnight session, squeezing short-end yields and tilting the yield curve into a bull-steepening pattern. Sitting roughly one basis point higher at 4.8039 percent, the two-year yield had shed 10 basis points through the prior overnight session before paring those losses. Ten-year Treasury yields edged up two basis points to close at 5.2575 percent, having pulled back six basis points from a multi-decade high of 5.3445 percent the previous session — a retreat that drew renewed demand into the government bond market.