Asian Markets Hold Breath for US Jobs Report Amid Ongoing Middle East Tensions

Asian markets were cautious ahead of the US jobs report on Friday, which could influence the Federal Reserve's interest rate decision next month. The MSCI Asia-Pacific shares index excluding Japan was flat, while Japan's Nikkei dropped 0.9%. South Korea's KOSPI slipped 0.5% and was down 5.0% for the week.

Investors are closely watching the US payrolls report, which is expected to show a rise of 80,000 jobs in July after a 57,000 gain in June. A strong number could reinforce higher interest rates, while a soft report might ease yields and shift policy expectations towards a dovish path.

The Middle East tensions also continued to weigh on markets, with Brent crude futures gaining 1% to $83.38 a barrel after rising 3.8% overnight. Higher oil prices lifted Treasury yields, with the 2-year note yield holding at 4.2496% and the ten-year yield steadying at 4.6757%.