Asian shares fall as bond, FX markets swing; US jobs data eyed

Asian shares declined on Friday as markets absorbed volatility in bond and currency trading ahead of key US employment figures. European stock futures indicated a higher open, with pan-region futures up 0.2% following overnight losses.

Investors are closely monitoring the upcoming US nonfarm payrolls report, which is expected to show a gain of 90,000 jobs and an unemployment rate holding steady at 4.1%. A stronger-than-expected reading could revive expectations for another Federal Reserve interest rate increase this month, though the market currently prices in only a 25% chance of that occurring.

The benchmark 10-year US Treasury yield had reached a 24-year high of 5.34% before experiencing a brief respite. The yield curve saw a bull steepening overnight as short-term yields fell, influenced by dovish comments from Federal Reserve officials. The 2-year Treasury yield was last up 1 basis point at 4.7934%, while the 10-year yield rose 2 basis points to 5.2495%.

In Europe, fiscal concerns in France contributed to a widening spread between French and German sovereign bond yields, reaching the highest level since 2012 and impacting European stocks and the euro. The euro fell 0.8% overnight to $1.1250, while the US dollar index gained 0.6% to 102.

Oil prices remained elevated, with US West Texas Intermediate crude futures slipping 0.4% to $92.46 a barrel after an overnight jump. Brent crude futures held above $102 a barrel. The rise in oil prices was attributed to a reported US military buildup in the Gulf and China's suspension of oil product exports.