Asian stocks retreated on Friday on lingering worries over the health of U.S. banks, an ongoing impasse over the U.S. debt ceiling and the Chinese economic recovery.
A firmer dollar weighed on commodity prices, with oil falling for a third consecutive session, copper hovering near six-month lows and gold nudging back towards $2,000 an ounce.
The yield on two-year Treasury slipped to 3.90 percent from 3.91 percent on growing expectations that the Federal Reserve will hold off on hiking interest rates at its next meeting in June.
However, Federal Reserve Governor Michelle Bowman said in a speech today that policy rate would need to remain sufficiently restrictive for some time to bring inflation down and create conditions that will support a sustainably strong labor market.
Chinese shares tumbled after inflation data pointed to weakening demand in the country. The benchmark Shanghai Composite Index slumped 1.1 percent to 3,272.36, while Hong Kong's Hang Seng Index dropped 0.6 percent to 19,627.24.
Japanese shares advanced amid gains in the tech sector and encouraging earnings news from Nissan Motor. Tokyo Electron, Advantest and Screen Holdings jumped 2-3 percent, while Nissan Motor surged 5.3 percent.
SoftBank Group lost 3.7 percent after reporting losses for a second consecutive year. Drug maker Takeda declined 2.5 percent after its annual profit missed estimates.
The Nikkei 225 Index advanced 0.9 percent to 29,388.30, while the broader Topix closed 0.6 percent higher at 2,096.39.
Seoul stocks closed lower for a fourth straight session after a Fed official said the U.S. central bank would need to raise rates further if inflation stays high. The Kospi fell 0.6 percent to 2,475.42, with LG Energy Solution and Korea Gas Corp losing 1-2 percent.
State utility Korea Electric Power rallied 1.9 percent on news that it plans to cut costs and sell assets as part of its self-rescue plans amid snowballing losses.
Australian markets ended flat with a positive bias as financial and healthcare stocks rose, offsetting losses in the mining and energy sectors. Gold miner Newcrest fell 2.2 percent after it extended the exclusivity period for Newmont's $20 billion buyout offer.
QBE Insurance lost 3.6 percent despite hiking its gross written premium growth forecast for fiscal 2023.
Across the Tasman, New Zealand's benchmark S&P NZX-50 Index slipped 0.2 percent to 11,863.56 after a survey showed activity in the country's manufacturing sector continued to contract in April.
U.S. stocks ended mixed overnight, with uncertainty over the debt ceiling, jitters over the health of regional banks and Disney's streaming business woes keeping investors nervous.
In economic news, U.S. producer prices showed a moderate rise last month, while the number of Americans filing new claims for jobless benefits jumped last week to the highest level since late 2021, separate reports showed.
The Dow shed 0.7 percent to end lower for the fourth consecutive session and the S&P 500 slipped 0.2 percent, while the tech-heavy Nasdaq Composite edged up 0.2 percent to reach its best closing level in over eight months.
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