Asia stocks mixed as investors watch US Treasury yields

  • Stocks in Asia were mixed Friday morning as investors watched yields on longer duration U.S. Treasurys.
  • The yield on the 30-year Treasury bond declined to a record low on Thursday, while the yield on the benchmark 10-year Treasury note touched a three-year low.
  • The historic drop in long-term U.S. bond yields came after the interest rates on the closely watched 10-year and 2-year Treasurys inverted — a bond market phenomenon that has historically been a reliable indicator of economic recessions.

Stocks in Asia were mixed Friday morning as investors watched yields on longer duration U.S. Treasurys.

The Nikkei 225 slipped 0.35% in early trade as shares of index heavyweight and robot maker Fanuc declined 0.97%. The Topix index also shed 0.33%.

In South Korea, the Kospi dropped 1.08% following its return from a holiday. Shares of chipmaker SK Hynix fell 1.56% and LG Chem slipped 2.01%. Meanwhile, Australia's S&P/ASX 200 traded fractionally higher.

Overall, the MSCI Asia ex-Japan index declined 0.14%.

US bonds watch

Investors are watching for movements in the bond market, particularly in U.S. Treasurys. The yield on the 30-year Treasury bond declined to a record low on Thursday, while the yield on the benchmark 10-year Treasury note touched a three-year low.

The yield on the 30-year Treasury bond was last at 1.9783%, while the rate on the 10-year Treasury note was at 1.5303%.

The historic drop in long-term U.S. bond yields came after the interest rates on the closely watched 10-year and 2-year Treasurys inverted — an bond market phenomenon that has historically been a reliable indicator of economic recessions.

US-China trade

Meanwhile, investors continue monitoring developments on the U.S.-China trade front. A spokesperson from China's foreign ministry said Thursday that Beijing hopes the"U.S. side will meet China half-way " on trade issues.

That statement came after China said earlier that the U.S. tariffs"seriously violated" a consensus reached by the two countries' presidents at the G-20 summit in June.

For its part, U.S. Commerce Secretary Wilbur Ross told CNBC Wednesday that a recent delay in upcoming tariffs was"not a quid pro quo " in trade negotiations with Beijing.

"The language used by both parties oozes of continued defensiveness and antagonism," Kathy Lien, managing director of foreign exchange strategy, wrote in a Thursday note.

"As long as this remains the case, investors will be nervous making it difficult for currencies and equities to rally," Lien said.

Asia-Pacific Market Indexes Chart

Overnight stateside, the Dow Jones Industrial Average closed 99.97 points higher at 25,579.39 after seeing its worst day of the year Wednesday. The S&P 500 was up 0.25% to end its trading day at 2,847.6, while the Nasdaq Composite closed slightly lower at 7,766.62.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 98.136 after bouncing from levels below 98.0 yesterday.

The Japanese yen traded at 106.05 against the dollar after a volatile session yesterday that saw seeing highs below 106.0. The Australian dollar changed hands at $0.6774 after rising from levels around $0.675 in the previous session.

Oil prices rose in the morning of Asian trading hours, with international benchmark Brent crude futures adding 0.34% to $58.43 per barrel and U.S. crude futures gaining 0.64% to $54.82 per barrel.

Here's a look at some of the data due today:

  • Hong Kong: Revised gross domestic product data for the second quarter at 4:30 p.m. HK/SIN

— CNBC's Yun Li contributed to this report.

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