(URGENT) Seoul stocks open sharply lower amid escalating hostilities in Mideast

Asian markets experienced a decline on Friday, with technology companies particularly hard hit in Tokyo and Seoul. Hong Kong's stock market saw a drop as bond yields reached multi-decade peaks, driven by heightened fears of further interest rate hikes. This was largely due to a resurgence of conflict in the Middle East, following the United States' attack on an Iranian military base in the Strait of Hormuz.

The attack triggered retaliatory strikes, disrupting oil supplies and prompting crude prices to surge by more than 2 percent, marking a 10 percent increase for the week. The situation has raised concerns about inflation, given the strait's critical role in global oil transport. As a result, the yield on 30-year UK government bonds has hit a level not seen since 1998, while 10-year debt yields have risen to levels last observed during the 2007-08 financial crisis.

The yield on Japan's 10-year bond is at a 30-year high, with similar trends observed in US Treasuries. Market analysts suggest that these rising yields pose a significant challenge to Asian equities, particularly longer-duration tech stocks. Investors are bracing for key economic data releases on jobs and inflation in the coming week, which could influence the Federal Reserve's decision to raise interest rates at its upcoming meeting.

Currently, there is a 70 percent probability of a rate hike, as indicated by Bloomberg's assessment. Federal Reserve Governor Michael Barr has emphasized the need to prepare for a rate hike if inflation remains persistently above the bank's 2 percent target, which has been the case for over five years. However, if inflation does not show signs of moderation, Barr indicated that decisive action to raise rates would be warranted.