Global markets experienced declines on Friday, with Asian shares mirroring losses on Wall Street as oil prices continued to climb, pushing Brent crude above $108 a barrel. The international benchmark for oil reached its highest level since May amid escalating tensions between the United States and Iran.
Japan's Nikkei 225 index fell 2.8%, while South Korea's Kospi dropped 2.3%. Hong Kong's Hang Seng dipped 0.8%, and mainland China's Shanghai Composite index was down 1.8%. Australia's S&P/ASX 200 declined 1.2%, with other Asian markets like Taiwan and India also reporting losses.
U.S. crude oil futures saw a slight increase, trading 0.7% higher at $103.22 per barrel. Brent crude was up 0.9% at $108.59. Analysts noted that oil flow through the Strait of Hormuz, a crucial global transport route, remains significantly below pre-war levels, highlighting the fragility of the current situation.
On Thursday, U.S. stock markets ended lower, with the S&P 500 shedding 0.6%, the Dow Jones Industrial Average losing 0.6%, and the Nasdaq composite falling 0.7%. Investors are anticipating the release of U.S. consumer price index data for August on Friday, ahead of the Federal Reserve's upcoming meeting. The U.S. producer price index for August had previously shown an acceleration in inflation, rising 5.4% year-on-year.
The bond market has also been volatile, with U.S. Treasury yields trading well above pre-war levels. This rise is attributed to higher energy prices, inflationary pressures, and increasing U.S. government debt. The yield on the 10-year Treasury rose to 4.96% early Friday from 4.83% on Wednesday.
In currency markets, the U.S. dollar weakened against the Japanese yen and the euro. The dollar fell to 154.35 yen from 154.42 yen, and the euro traded at $1.1605, down from $1.1612.