US Jobs Report Hangs Over Asia Amid Middle East Tensions

Asian stock markets are holding their breath as investors await the US jobs report, which could have a significant impact on the Federal Reserve's interest-rate decision next month. The MSCI Asia-Pacific shares index outside of Japan was flat and down 0.4% for the week.

The Japanese Nikkei dropped 0.9%, but is set to rise 1.2% for the week, while South Korea's KOSPI slipped 0.5% and fell 5% for the week in its seventh consecutive decline. The CSI 300 index in China rose 0.2%.

Investors are focused on the US payrolls report, which is expected to show a rise of 80,000 jobs in July after a 57,000 gain in June, with the unemployment rate forecast to remain at 4.2%. A strong jobs number could reinforce higher interest rates and put upward pressure on policy.

However, some analysts believe that a soft payrolls report may actually be positive for equities as yields ease and policy expectations shift towards a dovish path. Brent crude futures gained 1% to $83.38 a barrel due to rising tensions in the Middle East, but are still set for a weekly loss of 7.5%. The dollar was steady against the yen after bouncing overnight.