Asian Shares Retreat As US Treasury Yields Rise After Jobless Claims Data

(RTTNews) - Asian stocks fell on Friday as new data showed weakness in the U.S. economy and Treasury yields ticked higher on hawkish comments from Federal Reserve officials.

Regional losses remained capped amid optimism that a slowing U.S. economy would help keep inflationary pressures in check and convince the Federal Reserve to cut its main interest rate later this year.

According to data from CME Group, markets currently expect two rate cuts from the Fed this year.

China's Shanghai Composite index slipped 0.24 percent to 2,998.14 after reports that Canada is preparing potential new tariffs on Chinese-made electric vehicles, following similar action taken by the U.S. and European Union. Hong Kong's Hang Seng index fell 1.67 percent to 18,028.52 as the yuan continued to weaken on concerns about rising geopolitical tensions between China and the West.

Japanese markets ended a choppy session marginally lower as government bond yields moved higher and the dollar pushed to a fresh eight-week top above 159 yen, putting traders on alert for potential intervention.

Japan's top currency diplomat Masato Kanda said that authorities are ready to take appropriate measures if there are excessively volatile moves in the currency markets.

Japan's manufacturing activity eased in June due to rising costs while headline inflation rose to 2.8 percent from 2.5 percent in April, separate set of data showed.

Seoul stocks snapped a three-day winning streak due to profit taking in tech and auto stocks. The Kospi average settled 0.83 percent lower at 2,784.26.

Producer prices in the country rose for the sixth consecutive month in May, driven in part by the soaring prices of services and utility costs, central bank data revealed today.

Market bellwether Samsung Electronics lost 2 percent, No. 2 chipmaker SK Hynix gave up 1.5 percent and top carmaker Hyundai Motor shed 1.9 percent.

Australian markets eked out modest gains, led by healthcare and energy stocks.

The benchmark S&P/ASX 200 rose 0.34 percent to 7,796 despite the latest PMI data for June indicating a slowdown in business expansion. The broader All Ordinaries index closed up 0.35 percent at 8,039.90.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 index fell 0.76 percent to 11,682.39.

U.S. stocks ended mixed overnight while Treasury yields rose as investors reacted to mixed economic data and cautious comments from Fed officials on the rate path Data showed a slight decline in jobless claims last week and sluggish homebuilding in May.

In a discussion at the 2024 Michigan Bankers Association Convention, Minneapolis Fed President Neel Kashkari noted that it will probably take a year or two to get inflation back to the central bank's 2 percent target.

The Dow gained 0.8 percent to reach a nearly one-month closing high while the tech-heavy Nasdaq Composite shed 0.8 percent.

The S&P 500 briefly topped the 5,500 milestone for the first time ever before closing 0.3 percent lower.