Asian Markets Weigh Risks Amid Rising Bond Yields and Geopolitical Tensions

Asian markets remained cautious on Thursday as investors navigated rising global bond yields and shifting signals from geopolitics and trade diplomacy. The Japanese government bond market was under pressure after Tokyo markets reopened from a three-day holiday, with the 10-year yield jumping to its highest level since August 1996 at 3.06%. This move follows an overnight sell-off in U.S. Treasuries, which left the U.S. 10-year Treasury yield at 5.11%, its highest level since 2007.

Equities across the region were mixed as investors assessed both U.S.-China diplomacy and continued tensions involving Iran. The MSCI Asia ex-Japan index fell 0.64%, while Japan's Nikkei 225 gained 1.73%. Australia's S&P/ASX 200 dropped 1.2% to a more than three-month low.

Oil prices pulled back from recent highs, with Brent crude falling 1% to $102.05 per barrel and U.S. West Texas Intermediate slipping 0.74% to $91.48. Spot gold rose 0.35% to $4,301.89 an ounce as markets continued to weigh the risks of ongoing regional tensions.