Hong Kong's Hang Seng Index led losses across Asia on Friday, sliding to an 11-week low as investors awaited U.S. jobs data that could reshape bets on the Federal Reserve's next move. Tokyo inflation accelerated past forecasts, and a surge in Treasury yields and oil prices kept risk appetite in check across the region.
Hong Kong's Hang Seng Index dropped 3% to an 11-week low around 23,900 points on Friday, the steepest decline among major regional markets. The fall came as investors returned from Thursday's holiday to a sharp rise in global bond yields and renewed concern over oil supplies.
Nikkei and tech shares also retreat
Japan's Nikkei 225 closed 0.9% lower, while the broader TOPIX index slipped 1%, and the Hang Seng TECH sub-index traded 2.5% lower. South Korea's KOSPI edged up 0.5%, Australia's S&P/ASX 200 ended 0.8% higher, but Singapore's Straits Times Index fell 0.6%.
Tokyo inflation sharpens BOJ rate-hike bets
Tokyo's core consumer price index rose 2.7% year-on-year in September, accelerating from 1.8% in August and beating the 2.4% forecast. A summary of the Bank of Japan's September meeting showed some policymakers saw a need to accelerate interest-rate hikes as inflation risks mounted, after the BOJ had already lifted its policy rate to 1.25%. The yen firmed 0.1% to 157.8 per dollar following the data, reinforcing expectations of further tightening.
Jobs data looms over Fed bets
U.S. nonfarm payrolls, due later Friday, are forecast to show a gain of 89,000 jobs in September, with unemployment steady at 4.1%. Markets price just a 25% probability of an October Fed rate hike, down sharply from 69% a week earlier, while a December move remains fully priced, according to CME FedWatch. According to Chris Weston, head of research at Pepperstone: "a hot wages print could prove particularly influential for US rates, Treasuries and the USD".
Yields and oil keep pressure on risk appetite
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. Brent crude held above $102 a barrel as the U.S. reportedly plans a bigger military presence in the Middle East, while China halted oil-product exports. The U.S. dollar index was firm at 102, on track for a third straight week of gains, as the volatility drove safe-haven flows into the dollar and the Swiss franc.
Sources: All News, Economy News
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