Asian shares mixed after global bond sell-off deepens and ahead of US jobs data

HONG KONG (AP) — Asian shares were mixed Friday after a global bond sell-off deepened and ahead of a U.S. monthly jobs report due later in the day.

Oil prices steadied even as the U.S. sends another aircraft carrier and more troops to the Middle East, and as President Donald Trump threatened more possible escalations against Iran .

Japan’s Nikkei 225 fell 0.9% to 68,326.72. South Korea’s Kospi added 0.2% to 6,984.96. Hong Kong’s Hang Seng lost 2.7% to 23,956.32, hitting the lowest level since July. Australia’s S&P/ASX 200 gained 0.4% to 8,651.30. Taiwan’s Taiex advanced 0.2%.

Markets in mainland China were closed for a holiday.

U.S. futures edged up after U.S. Treasury yields held steadier early Friday.

In the bond market, the yield on the 10-year U.S. Treasury was at around 5.25%, after it reached 5.34% on Thursday, the highest since 2002. It crossed the 5% mark last month, as inflationary pressure from the global energy shock driven by the Iran war and rising U.S. government debt pushed investors to demand higher returns.

The 5% level on the U.S. 10-year Treasury yield has been an “important psychological threshold” for investors, David Clewell, a portfolio manager at T. Rowe Price, said in a commentary this week.

Factoring in the U.S.'s resilient economic growth, there is a “credible” likelihood that the U.S. 10-year Treasury yield can rise toward 5.5% to 6%, Clewell suggested. Ballooning bond yields have been putting downward pressure on stock markets, as higher borrowing costs can undercut stock returns.

On Thursday, benchmark stock indexes fell sharply in Europe as government bond yields shot up. On Wall Street, the S&P 500 added 0.2%, the Dow Jones Industrial Average edged up less than 0.1%, and the Nasdaq composite rose less than 0.1%.

Investors and traders are monitoring closely the U.S. monthly jobs report for September to be released on Friday, as the data could provide more signal to the likelihood of an October interest rate hike by the Federal Reserve, after the Fed raised rates in September for the first time in three years .

Oil prices declined modestly early Friday as uncertainties surrounding the situation in the Middle East and of a de-escalation between the U.S. and Iran dragged on.

The U.S. military is deploying thousands of troops aboard a group of ships, including a third aircraft carrier, to the Middle East, according to a U.S. official on Thursday, after Trump on Wednesday threatened to “blow them up” or make a deal, referring to Iran, in an exchange with reporters.

Brent crude, the international standard, lost 0.2% to $102.13 a barrel after advancing on Thursday. That's well above the approximately $72 per barrel level in late February before the war.

The U.S. dollar fell to 157.91 Japanese yen from 158.09 yen. The euro was trading at $1.1250, up from $1.1244.

AP Business Writer Stan Choe contributed to this report.