The Hong Kong Stock Exchange
The Hong Kong Stock Exchange. Image Credit: AP

Tokyo/Hong Kong: Asian shares on Friday were headed for the worst month since the onset of the COVID-19 pandemic, while jitters in currency and bond markets persisted over hawkish talk from central banks, worries about global recession and rising geopolitical risk.

MSCI's broadest index of Asia-Pacific shares outside Japan was largely flat on Friday, as a bounce in Hong Kong and among mainland Chinese bluechips offset declines elsewhere. Japan's Nikkei fell 1.6%.

Relief came from Chinese factory activity data that beat market expectations, with the manufacturing sector returning to growth in September after contracting for two m

"Japanese shares are likely to continue in the direction of declining, following a rebound in the previous session and as European and US shares dropped," SBI Securities said in a note.

As the financial half-year in Japan closes Friday, "a wait-and-see attitude may grow" among investors, the brokerage added.

Overnight, Wall Street's main stock indices slumped as US treasury yields continued to rise and the latest data showed a drop in first-time unemployment benefit claims, falling below 200,000 for the first time since May.

The dollar fetched 144.47 yen in early Asian trade, against 144.42 yen in New York late Thursday.

Japan is ready to "take necessary action" to respond to undesirable rapid, speculative currency movements, Finance Minister Shunichi Suzuki said Thursday at a meeting of the Asian Development Bank in Manila.

Japan's jobless rate in August stood at 2.5 percent, down 0.1 percent from the previous month, while the number of jobs available to every 100 job seekers improved to 132 from 129, official data showed.

Among major equities, SoftBank Group dropped 2.04 percent to 4,928.0 yen, Sony Group was down two percent at 9,397 yen, and Toyota was off 1.99 percent at 1,919.5 yen.

Hitachi was down 1.77 percent at 6,231 yen. A report released Friday said Hitachi and General Electric will jointly develop a next-generation nuclear reactor intended to address safety issues that contributed to the 2011 Fukushima nuclear crisis.

Hong Kong stocks flat

Meanwhile, Hong Kong stocks were barely moved at the open of business Friday following another painful week for the market, with investor confidence being battered by a range of crises including an expected recession, the Ukraine war and China's economic woes.

The Hang Seng Index inched up 0.06 points to 17,165.93.

Mainland markets were also flat, with the Shanghai Composite Index edging 0.96 points higher to 3,042.17 and the Shenzhen Composite Index on China's second exchange adding 0.16 points to 1,937.36.