Asia shares fall as US 10-year Treasury yield hits 24-year high before jobs data

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The benchmark 10-year U.S. Treasury yield reached 5.34% overnight, the highest since 2002, before retreating to around 5.25% in Asian trading, Reuters reported from Sydney on October 2. Fiscal worries in France pushed the spread between French and German sovereign bond yields above 140 basis points — the widest since 2012 — and the euro slid to $1.1215, its lowest since May 2025.

In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.5% and was on track for a 1.7% weekly decline; Japan's Nikkei dropped 0.7% but was set for a 3.1% weekly gain. Mainland Chinese markets are closed for a public holiday through next Wednesday. The U.S. dollar index rose to 102.09, its highest since April 2025, on track for a third straight week of gains; the yen traded at 158.13 per dollar after data showed underlying inflation in Japan's capital accelerated to 2.7% in September.

Oil stayed firm: U.S. West Texas Intermediate crude was steady at $92.84 a barrel and Brent held above $102, as the U.S. reportedly sent more troops and carriers to the Middle East and China suspended oil product exports. All eyes are now on the U.S. nonfarm payrolls due later in the day, with forecasts centered on a rise of 90,000 jobs in September and the unemployment rate steady at 4.1%. Markets are pricing in a 25% probability that the Federal Reserve raises interest rates again in October, down from 69% a week ago.