Global Market Turmoil: Asian Shares Mixed Amid Bond Sell-Off and Oil Price Fluctuations

Asian shares experienced mixed trading on Friday as a global bond sell-off pushed U.S. Treasury yields to their highest levels in years. The benchmark U.S. 10-year Treasury yield, which surpassed 5.20% on Thursday, eased slightly to around 5.19% early Friday. This surge in yields, the highest since 2007, reflects bond investors demanding higher compensation due to increasing risks and uncertainties.

These uncertainties stem from growing inflationary pressures, exacerbated by the energy shock from the conflict in Iran, and rising U.S. government debt. The sell-off in the bond market has consequently applied additional pressure to stock markets worldwide.

In regional trading, Japan’s Nikkei 225 index rose 1.2% to 66,318.14. Conversely, Hong Kong's Hang Seng index fell 1.7% to 24,333.20, and Australia’s S&P/ASX 200 declined 0.5% to 8,660.30. India's Sensex showed a modest gain of 0.2%. Markets in mainland China, Taiwan, and South Korea remained closed for a holiday.

On Wall Street Thursday, the S&P 500 index closed nearly unchanged, down less than 0.1%. The Dow Jones Industrial Average saw a 0.3% decrease, while the tech-heavy Nasdaq composite climbed by less than 0.1%.

Oil prices saw a decline in early Friday trading as traders looked for indications of the reopening of the Strait of Hormuz, a critical route for global oil transport. Brent crude, the international benchmark, dropped 1.4% to $98.84 per barrel. While still above pre-war levels, it remains below the $100 mark.

Investor attention was also directed towards a meeting in Washington between U.S. President Donald Trump and Chinese President Xi Jinping. Analysts indicated that limited concrete progress was made, although discussions touched upon trade, artificial intelligence, and the Middle East. The U.S. dollar weakened against the Japanese yen, trading at 158.34 yen, down from 158.86 yen. The euro also fell to $1.1370 from $1.1380.