By Shinichi Saoshiro
TOKYO (Reuters) - Asian shares lost ground on Friday after a weak session on Wall Street, while global sovereign debt yields were elevated across the board on bets the European Central Bank is moving closer to unwinding its massive monetary stimulus.
Spreadbetters expected Britain's FTSE (FTSE) to open 0.25 percent lower, Germany's DAX (GDAXI) to open 0.3 percent lower and France's CAC (FCHI) to open down 0.2 percent.
MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) slipped 0.4 percent, after the Dow (DJI) lost 0.7 percent and the tech-heavy Nasdaq (IXIC) fell 1 percent on Thursday, partly as higher Treasury yields dimmed the appeal of equities.
Japan's Nikkei (N225) was down 0.5 percent, South Korea's KOSPI (KS11) dropped 0.3 percent and Australian stocks (AXJO) declined 0.9 percent. Hong Kong's Hang Seng (HSI) slipped 0.4 percent.
The prospect of the ECB turning off the flow of easy money has been a dominant global market theme since President Mario Draghi's hawkish comments last week, pushing bond yields higher and hurting equities.
The pan-European STOXX 600 (STOXX) fell to an 11-week low the previous day and the German 10-year bund yield
"It is natural for risk assets in developed markets to adjust lower on prospects of curbed liquidity, as easy money has allowed them to rise far out of proportion with their underlying real economies," said Yoshinori Shigemi, global market strategist at JPMorgan (NYSE:JPM) Asset Management.
"For the ECB, tapering of easy policy and hiking rates are two totally different things, and it is likely to make this clear. But right now the markets are having a hard time believing the ECB's intentions."
The 10-year Treasury note yield (US10YT=RR) stood near a two-month high of 2.391 percent. With more focus on the euro zone bond market's rise in yields, Treasuries brushed off Thursday's weaker-than-expected U.S. ADP employment data.
"Expectations that the European Central Bank and other central banks joining the Federal Reserve in moving towards tighter policies are causing a diversification of funds away from Treasuries," said Junichi Ishikawa, senior forex strategist at IG Securities in Tokyo.
"The key point is that higher U.S. yields also tend to weigh on high-tech sectors by increasing their funding costs."
The 10-year Japanese government bond (JGB) yield
But the rise prompted the Bank of Japan to act, pushing the 10-year JGB yield back to 0.090 percent. The central bank, which has tasked itself to control the yield curve as a part of its easy policy, offered to buy an unlimited amount of 10-year JGBs on Friday in order to cap yields.
In currencies, the euro was little changed at $1.1418
The dollar was up 0.4 percent at 113.665 yen
The markets looked ahead to the closely watched U.S. non-farm jobs report due later in the day.
Much focus was on the wage component of the employment report and whether spending by U.S. consumers would be strong enough to back the Fed's intention to further tighten policy.
Crude oil prices slipped after a sharp but short-lived boost from a bigger-than-expected decline in U.S. inventories of crude and gasoline faded. [O/R]
U.S. crude (CLc1) fell 1.3 percent to $44.65 a barrel and Brent (LCOc1) declined 1.2 percent to $47.52 a barrel.
Gold and silver extended their decline with higher U.S. yields denting the allure of non-yielding precious metals.