GLOBAL MARKETS-Asian shares pause for US jobs, oil extends gains on Mideast risk

Asian shares were mixed on Friday, with investors awaiting US jobs data that could influence the Federal Reserve's interest-rate decision next month, amidst rising oil prices and Middle East tensions.

Asian ‌shares ​held their breath on Friday ahead of U.S. jobs data that could prove pivotal for next month's interest-rate decision by the Federal Reserve, while rising oil prices served as a reminder that Middle East tensions remain far from resolved. MSCI's broadest index of Asia-Pacific shares ‌outside Japan slipped 0.1% and was down 0.5% for the week. Japan's Nikkei dropped 0.5% although it was set for a weekly rise of 1.7%. South Korea's KOSPI also fell 0.5% and was down 5.1% for the week for a seventh straight week of declines. The index had doubled in the first half of the year, swept up by the blistering demand for AI-linked chip stocks. China's ‌CSI 300 rose 0.8% after data showed China's huge export machine kept powering ahead to boost the economy. After bouts of volatility sparked by concerns over the durability of the ‌AI-driven rally, investors are now squarely focused on the U.S. payrolls report due later in the day, which could prove crucial for the interest-rate outlook. Forecasts are centred on a rise of 80,000 jobs for July after a 57,000 gain in June, with the unemployment rate forecast to hold steady at 4.2%. The stakes are high as markets cannot seem to make up their mind about how the Federal Reserve might move next month, with a rate ⁠hike seen ​as a coin toss.

"With yields and inflation still ⁠the key risks for stocks, we expect Friday's NFP to trade as a 'good news is bad news' print," said Michael Feroli, chief U.S. economist at JPMorgan, adding that a strong jobs number would reinforce higher-for-longer pricing and put ⁠upward pressure on rates. Conversely, equities may respond positively to a soft payrolls report as yields ease and policy expectations shift toward a dovish path, added Feroli. Nasdaq futures inched up 0.1% while S&P 500 futures were ​flat. European bourses are set for a lower open, with pan-region stock futures down 0.2%. OIL CLIMBS AGAIN Tensions in the Middle East flared up again after Yemen's Houthis ⁠attacked Saudi Arabia, a major oil supplier. Riyadh has warned coordinated attacks by the Houthis and Iran-backed Iraqi militias were imminent. Brent crude futures gained 1.5% to $83.78 a barrel, after jumping 3.8% overnight. They were, however, still set for a weekly ⁠loss ​of 7% and remained well off their recent peak of $102 a barrel two weeks ago. Iran is reviewing a preliminary bill that would bar U.S., Israeli and other "hostile" vessels from transiting the Strait of Hormuz. The draft bill would impose fines of up to 20% of a ship's cargo value for violations of the proposed restrictions. Higher oil prices lifted ⁠Treasury yields. The 2-year note yield held at 4.2496% in Asia, after rising 7 basis points overnight, while the 10-year yield steadied at 4.6821%, having gained 5 bps overnight. The dollar was ⁠steady in Asia on Friday after bouncing overnight. Against ⁠the Japanese yen, the dollar traded at 158.38 yen, after rising 0.4% overnight to break above the 200-day average of around 158. The U.S. jobs report could decide the next moves in the yen after last week's historic currency market intervention from Japan and the U.S. ‌sparked a sharp rally. Spot gold ‌rose 0.7% to $4,268 an ounce, while spot silver rose 1.3% to $62.29 an ounce.