Asian stocks weather bond storm, oil retreats slightly

Asian equities were broadly unchanged on Friday, according to Business Recorder, even as a relentless bond sell-off drove longer-dated US yields to levels not seen in around twenty years. The 10-year Treasury yield touched a 19-year peak of 5.2251% after a two-day surge, while the 30-year yield reached 5.5016%, its highest since 2004. Higher borrowing costs are squeezing risk assets, and US mortgage rates have climbed to 7%.

Oil has moved back above $100 a barrel, with Brent crude trading near $105, reviving inflation worries and raising bets that the Federal Reserve will lift rates several more times. The central bank made its initial increase in over three years last week, and the dollar is heading for a weekly gain of around 1%. Norway's Norges Bank raised rates on Thursday, while Sweden's Riksbank signalled a likely move by year-end.

Chinese President Xi Jinping is holding talks in Washington with Donald Trump, yet there has been little sign of progress on artificial intelligence, commerce, Taiwan or the conflict with Iran. MSCI's Asia-Pacific index excluding Japan was flat as markets including mainland China, Taiwan and South Korea were shut for a holiday. The Nikkei in Japan rose 1%, Australia's resources-heavy shares slipped 0.6% and Hong Kong's Hang Seng fell 1%.