Asian equities pulled back on Friday amid concerns about the upcoming U.S. jobs report, ongoing worries about China's economic growth, and a growing risk that Japanese authorities may intervene to bolster the yen.
The U.S. dollar remained stable in Asian trading and appeared poised to maintain its longest streak of weekly gains in over a year.
U.S. Treasury yields for 10-year notes remained near nine-month highs, following remarks from Federal Reserve officials expressing concerns about the potential inflationary impact of President-elect Donald Trump's policies.
Gold saw a slight uptick, approaching a four-week high, while oil prices were on track for a third consecutive week of gains, driven by increased demand for winter fuel amidst cold weather in parts of the U.S. and Europe.
In China, markets declined due to fears of slowing economic growth and potential deflation. The Shanghai Composite Index dropped 1.33% to close at 3,168.52, while the yuan reached a 16-month low after the People's Bank of China halted government bond purchases amid record-low yields.
Sunac China saw its shares plummet by 26% following a liquidation filing against the property developer. Meanwhile, the Hang Seng Index in Hong Kong fell 0.92% to 19,064.29, with real estate and tech stocks affected by U.S.-China tensions and issues within the property sector.
Japanese markets were also down as uncertainties surrounding Federal Reserve and Bank of Japan policies weighed on investor sentiment. The Nikkei average declined 1.05% to close at 39,190.40, and the broader Topix index dropped 0.80% to settle at 2,714.12.
Fast Retailing, the owner of Uniqlo, saw a significant drop of 6.5% after posting disappointing earnings. On the other hand, Advantest, a supplier to Nvidia, experienced a surge of 5.1%.
In Seoul, the Kospi index ended a five-day winning streak, finishing down 0.24% at 2,515.78. Losses were led by tech, battery, and chemical companies, although Hyundai Motor gained 0.1% after announcing a strategic partnership with Nvidia to develop advanced AI technologies for future mobility. Kia Corp, its affiliate, rallied 2.2%.
Australian markets closed lower, weighed down by banks, energy, and tech-related stocks. The S&P/ASX 200 index fell 0.42% to 8,294.10, even as weaker-than-expected domestic retail sales increased the likelihood of a rate cut as early as next month.
Westpac Banking Corp dropped 1.7% following a downgrade to an "underweight" rating by Morgan Stanley. Across the Tasman Sea, New Zealand's S&P/NZX 50 index slipped by 0.37% to 12,895.98.
Meanwhile, U.S. markets were closed on Thursday in observance of a day honoring former U.S. President Jimmy Carter.
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