Hong Kong Stocks Fall 3% as Bond Yields and U.S. Jobs Data Weigh

Asian stock markets traded mixed while Hong Kong shares tumbled 3% to an 11-week low, pressured by surging global bond yields, rising crude prices, and intense investor caution ahead of crucial U.S. labor market data.

Hang Seng Index Hits 11-Week Low

The Hang Seng Index dropped 3% to approximately 23,900 points, making Hong Kong the hardest-hit regional market in the session. The sharp pullback reflects mounting pressure on equities as borrowing costs climb globally.

Across other major regional exchanges, Tokyo's Nikkei 225 closed 0.9% lower, while the broader TOPIX index slipped 1.0%.

Treasury Yields and Inflation Pressures

The equity downturn coincides with a rapid escalation in global fixed-income yields. The U.S. 10-year Treasury yield climbed to 5.34% on Thursday, marking its highest level since 2002, before easing back to around 5.25% during Asian trading hours.

Simultaneously, domestic inflation data in Japan added to regional headwinds. Tokyo's core consumer price index rose 2.7% year-on-year in September, accelerating from 1.8% in August and exceeding the 2.4% consensus market forecast.

Focus Shifts to U.S. Labor Data

Investors across Asia are holding back on major positions ahead of the U.S. nonfarm payrolls report. Economists expect the data to show that the U.S. economy added 89,000 jobs in September, with the unemployment rate anticipated to hold steady at 4.1%.

These employment figures carry significant weight for central bank policy expectations. Stronger-than-expected labor additions or wage growth could cement expectations for prolonged high interest rates, further testing equity valuations across international markets already strained by multi-decade high bond yields.