Asian shares traded mixed in early Thursday trading as investors assessed recent movements in oil prices and the US bond market, while also watching currency fluctuations.
Japan's benchmark Nikkei 225 rose 1.3% to 65,883.41 in morning trading, helped by gains among some chipmakers amid continued interest in artificial intelligence.
Australia's S&P/ASX 200 fell 0.7% to 8,700.50. Hong Kong's Hang Seng Index declined 0.5% to 24,715.95, while the Shanghai Composite slipped 0.8% to 3,902.33.
South Korean markets were closed for the Chuseok autumn harvest holiday.
In energy trading, US benchmark crude fell 0.82% to $91.40 a barrel, while Brent crude, the international benchmark, dropped 0.83% to $102.22 a barrel.
Brent prices remain well above the roughly $72 a barrel recorded before the war with Iran began. Investors remain concerned that the conflict could disrupt oil supplies in the Middle East for an extended period.
Talks between US and Iranian officials are continuing through mediators, but no concrete agreement has emerged so far.
US bond yields pressure Wall Street
Wall Street came under pressure Wednesday as a stronger-than-expected economic report raised fresh concerns about inflation and pushed US Treasury yields higher.
The S&P 500 fell 0.8%, after ending the previous session just 0.4% below its record high set last month. The Dow Jones Industrial Average dropped 352 points, or 0.7%, while the Nasdaq composite fell 1.1% from its record level.
The yield on the 10-year US Treasury rose to 5.10% from 4.96%, a significant move in the bond market.
Higher bond yields can weigh on stocks and other investments while also making borrowing more expensive, which can slow economic activity.
The 10-year yield briefly reached nearly 5.14% on Wednesday, returning to levels last seen in 2007, before the global financial crisis sent borrowing costs sharply lower.
Yields have risen in recent weeks amid concerns about persistent inflation, the US government's large debt burden and other economic risks.
Inflation worries intensified after a preliminary report indicated that US business activity had grown at its fastest pace in more than five years.
US inflation has remained elevated, prompting the Federal Reserve to raise its short-term interest rate last week for the first time in three years.
Fed Gov. Michael Barr said in a speech this week that further rate increases “are likely to be needed” to bring inflation down to the central bank's 2% target.
Yen remains weak
The Bank of Japan recently raised its benchmark interest rate in an effort to support the Japanese yen. However, the move had largely been expected by investors, limiting its impact on the currency.
A weaker yen puts additional pressure on Japan because the country relies heavily on imported oil, particularly when global energy prices are high.
In currency trading, the US dollar slipped to 157.94 yen from 158.30 yen. The euro was little changed at $1.1382, compared with $1.1388.
In US markets, the S&P 500 fell 58.61 points to 7,706.03. The Dow dropped 352.10 points to 51,511.59, while the Nasdaq composite declined 308.24 points to 26,936.04.