Asian shares are mixed after global bond sell-off and drop in oil prices

Asian stock markets experienced a mixed day on Friday, influenced by a bond sell-off that pushed U.S. Treasury yields to their highest levels in years. The Nikkei 225, a key Japanese stock index, rose by 1.2% to 66,318.14. Conversely, the Hang Seng in Hong Kong declined by 1.7% to 24,333.20, while Australia's S&P/ASX 200 lost 0.5% to 8,660.30. The mainland Chinese markets, Taiwan, and South Korea were all closed on Friday due to a national holiday.

The U.S. stock market's performance was relatively stable, with the S&P 500 barely moving, dropping less than 0.1% and the Dow Jones Industrial Average falling by 0.3%. Meanwhile, the technology-focused Nasdaq composite index saw a slight increase of less than 0.1%.

The global bond market's sell-off had a significant impact on stock markets. The yield on the U.S. 10-year Treasury surged to its highest level since 2007, reaching around 5.19% early Friday, up from 5.20% on Thursday. This surge was driven by investors demanding higher compensation due to mounting inflationary pressures from the Iran war-driven energy crisis and rising U.S. government debt.

Oil prices also experienced a drop in early Friday trading. Brent crude, the global benchmark, fell by 1.4% to $98.84 per barrel, staying under the $100 mark. Although this price level is still considerably higher than the roughly $72 per barrel in late February, prior to the onset of the war. As investors continue to monitor the outcome of the meeting between U.S. President Donald Trump and Chinese President Xi Jinping, it remains to be seen if concrete progress will be made.

Analysts have noted that while both sides touched upon topics like trade, artificial intelligence, and the Middle East, significant advancements have not been achieved thus far. The U.S. dollar weakened to 158.34 Japanese yen from 158.86 yen, while the euro traded at $1.1370, down from $1.1380.