Asian stocks declined as robust U.S. economic data reinforced expectations that interest rates might remain elevated for an extended period, with the Federal Reserve likely to delay rate cuts.
The MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 1% and was heading towards a 1.5% loss for the week, breaking its four-week streak of gains. Japan’s Nikkei also fell by 1%.
In the U.S., the S&P 500 decreased by 0.7% to 5,267.84, while the Dow Jones Industrial Average, comprising 30 major U.S. companies, fell by 1.5% to 39,065.26. The tech-heavy Nasdaq Composite Index saw a smaller decline of 0.4% to 16,736.03.
U.S. Treasury yields rose following data indicating an uptick in American business activity and a persistently tight labour market, which supports the Federal Reserve’s stance on maintaining higher interest rates longer. The yield on the benchmark 10-year Treasury bonds increased to 4.4787% from 4.434% the previous Wednesday.
Tokyo’s stock market opened lower on Friday, with the benchmark Nikkei 225 index dropping 1.50% to 38,518.54 in early trading, while the broader Topix index decreased by 1.28% to 2,719.49.
The dollar was trading at 156.95 yen, nearly unchanged from 156.93 yen in New York on Thursday.
