TOKYO Reuters -- Asian stocks declined on Friday, extending a global equity slide to a third day, as investors fretted over the recession risks amid signs of more aggressive central bank policy tightening.
After several Federal Reserve officials talked up additional rate hikes ahead of the U.S. jobs report later in the day, while rising crude oil prices compounded concerns about prolonged inflation.
Japan's Nikkei dropped 0.7% as of 0130 GMT, back from a two-week high on Thursday.
South Korea's Kospi fell by 0.33%, weighed down by a decline in Samsung Electronics shares, after the technology giant flagged a worse than expected 32% drop in quarterly operating earnings. Australia's stock benchmark fell 0.59%.
In early trade, Hong Kong's Hang Seng was 1.17% lower, with its tech stocks tumbling 2.32%. Mainland shares are closed for the final day of the Golden Week holiday.
The U.S. emini S&P 500 futures were 0.12% lower, after the index dropped 1% overnight. N Fed officials showed no intention of backing down from the most aggressive rate hike campaign in decades, with Fed Governor Lisa Cook, Chicago Fed President Charles Evans and Minneapolis Fed President Neel Kashkari all insisting that the inflation fight was ongoing and they were not prepared to change course.
The week started on a strong footing with the MSCI world equity index rallying 5.65% in the first two days amid speculation that central bank tightening might slow, but that has fizzled out since Wednesday.
Markets are pricing an 85.5% chance of a 75 basis point increase for next month's Federal Open Market Committee meeting, and 14.5% odds for a half point bump.
A steady diet of rate hikes has begun to take a bite out of hiring and wage inflation, according to Friday's non-farm payrolls report.
Tapas Strickland, head of market economics at National Australia Bank, said the Fed's hawkish comments were a clear pushback on the Fed will pivot' narrative that has supported risk assets since the beginning of the week.
It's probably a factor that there's a positioning ahead of U.S. payrolls tonight. Given the rally in risk assets earlier in the week, the pain trade would appear to be a 'Good news is bad news' print. The yield on the 10-year Treasury note was 3.8297% in Tokyo trading, a little changed from its New York close after a two-day rebound from a two-week low of 3.5620%.
The dollar index, which tracks the dollar against a basket of six major peers, was little changed at 112.24 after a 1.84% two-day rally from a two-week low.
The pound was near its lowest level this week, last changing hands at $1.1164, while the euro fell to its lowest level since Monday at $0.9787.
Japan's yen fell past 145 again overnight and fluctuated around that level in early Friday trading. The Japanese government intervened to support their currency for the first time since 1998 on Sept. 22 following a break of the 145 level.
Crude oil went up on Friday due to output cuts announced by the OPEC this week. O R crude futures rose 19 cents to $94.61 a barrel. After hitting $89.37 per barrel, the highest since Sept. 14, WTI crude futures rose 24 cents to $88.69 a barrel.