Asia stocks fall as surging yields weigh; Trump-Xi talks in focus

Asian stocks experienced a decline on Thursday as surging global bond yields affected risk assets, while investors kept a close eye on the upcoming summit between U.S. President Donald Trump and Chinese President Xi Jinping. Despite Japan's Nikkei 225 and TOPIX gaining slightly, their gains were overshadowed by a sharp rise in domestic and U.S. bond yields.

The 10-year Japanese government bond yield reached a 30-year high, fueling concerns about central banks potentially maintaining elevated rates to combat persistent inflation, especially with oil prices remaining high. U.S. stock index futures also saw a slight decrease following a drop in Wall Street overnight, as yields and oil prices continued to rise.

While Japan's Nikkei 225 rose by 1.5% and the TOPIX increased by 0.2%, China's Shanghai Composite and the blue-chip Shanghai Shenzhen CSI 300 both saw declines of nearly 1% and 1.3%, respectively. Hong Kong's Hang Seng index also fell by 0.6%. Investors were closely monitoring Trump's meeting with Xi in Washington, where they were expected to discuss trade, artificial intelligence, technology, and Taiwan.

In Australia, the S&P/ASX 200 fell by 0.7%, while Australia's employment growth exceeded expectations, but the unemployment rate reached a five-year high due to more people entering the labor force. South Korean markets were closed for a public holiday.