Asian equities climbed, while the dollar and Treasuries steadied following big moves in the US session triggered by a paring back of Federal Reserve rate cut expectations.

Japanese benchmarks gained about 0.8%, supported by weakness in the yen as the country’s economic growth slowed. South Korean shares fell, weighed down by battery makers on news that Donald Trump may eliminate a tax credit for electric vehicle purchases. US contracts slipped in early Asian trading.

Shares in mainland China and Hong Kong opened lower.

The dollar was little changed after rising for a fifth session on Thursday. The greenback received a boost from Fed Chair Jerome Powell’s comments that the central bank will be in no rush to cut interest rates. US two-year yields spiked after the remarks and traders dialed back bets on a December rate reduction.
“We think a December rate cut is in the cards and we think there will be at least two cuts next year,” Salman Niaz, head of global fixed income for APAC ex-Japan at Goldman Sachs Asset Management, said on Bloomberg Television.

“The strength of the dollar has obviously taken away some of the returns from emerging markets local currency bonds, but we think the more attractive opportunity at this point is in the hard currency aspect of emerging markets,” Niaz said, referring to dollar-denominated debt.

Developing nations’ assets suffered this week amid developments on US President-elect Trump’s cabinet, shifting interest-rate forecasts and China’s economic uncertainties. A gauge of emerging markets equities is on pace for its worst week since June 2022, while a separate index of emerging markets currencies is set for its poorest showing since August last year.

In Asia, South Korea’s won slipped 0.4% against the dollar on Friday after being added to the US Treasury’s “monitoring list” for foreign-exchange practices. Focus is also on Alibaba Group Holding Ltd.’s earnings later Friday after another Chinese consumption bellwether JD.com Inc posted a moderate expansion in revenue.

Elsewhere, data set for release in the region includes gross-domestic product for Malaysia and Hong Kong, while trade numbers in Indonesia are expected. Markets are closed in India.

In commodities, oil headed for a weekly drop, weighed down by the impact of a stronger dollar and concerns the global market will flip to a glut next year. Gold held near a two-month low.