Asian shares held their nerve on Friday as a relentless bond selloff pushed longer-dated US yields to two-decade highs, raising borrowing costs worldwide and threatening lofty equity valuations. In Hong Kong, the benchmark Hang Seng Index opened down 237 points, or 0.96 percent, at 24,523. The tech index was 42 points, or 0.99 percent, lower at 4,318 while the China Enterprises Index fell 93 points, or 1.13 percent, to 8,172. With mainland and South Korean bourses closed for the autumn festivals, the Nikkei in Tokyo opened up 125 points, or 0.19 percent, at 65,639 before climbing strongly to be 807 points higher at one stage before lunch. Risk assets are being squeezed by a dramatic selloff in global bonds, as inflation worries and fiscal strains push investors to demand ever-higher returns particularly on long-dated debt. "The world's bond markets are screaming, and ignoring it could prove very expensive," said Nigel Green, chief executive of deVere Group, a financial advisory firm. "Once risk-free rates sit above five percent in the world's largest economy, every asset on the planet has to justify its price against that. Equities, property, private credit, emerging market debt – nothing's immune." The benchmark 10-year Treasury yield rose one basis point to 5.1915 percent, having surged 20 bps in just two days to a new 19-year peak of 5.2251 percent. That was the biggest two-day gain since April last year when Trump's Liberation Day tariffs spooked markets. Thirty-year US bond yields climbed two basis points to 5.4805 percent, having surged 16 bps over the past two days to hit 5.5016 percent, the highest since 2004. That lifted US mortgage rates to seven percent, hamstringing the housing market. Asian bonds extended the global selloff, with Japan's 10-year government bond yields up four bps to 3.115 percent, the highest since 1996. Australia's 10-year government bond yields also rose four bps to 5.408 percent. There was no respite at the short end of the Treasury curve either. Fed funds futures now imply a 71 percent chance of another rate hike next month, up from about 53 percent earlier this week, and more than 90 basis points of tightening still to come this cycle, equivalent to almost four quarter-point hikes. The US 2-year yields were steady at 4.9035 percent, having jumped 16 bps this week to hover near a two-year high. The Fed's return to rate hikes last week is rippling across global markets. As inflation pressures intensify, smaller central banks are shifting to a more hawkish stance, with Norway's Norges Bank raising rates on Thursday and Sweden's Riksbank signalling it was likely to follow suit by the year end. (Reuters) Edited by Aaron Tam

U.S. President Donald Trump hosted Chinese President Xi Jinping on Thursday at the White House.