Asian stocks fell Friday and a dollar gauge hovered near a record high ahead of key US jobs data that could stir expectations for another sharp Federal Reserve interest-rate hike. A drop in Japan sapped the region-wide equity index, while US futures wavered after Wall Street snapped a four-day losing streak to eke out modest gains.

The jobs update Friday is expected to show healthy payrolls growth and follows a stronger-than-expected US manufacturing report. Traders increasingly anticipate another large 75 basis points Fed rate rise to cool inflation.

The two-year Treasury yield was at the highest since 2007 against that backdrop, while the Bloomberg Dollar Spot Index inched back from the unprecedented level hit Thursday. The yen and the euro strengthened.

Also read| Asian stocks fall on hawkish US Fed outlook; oil trims drop, dollar gauge steady

Global bonds as a whole slumped into their first bear market in a generation: the Bloomberg Global Aggregate Total Return Index of government and investment-grade corporate bonds is down more than 20% from a 2021 peak.

Oil bounced above $87 a barrel, undoing some of the losses sparked by China’s move to lock down the metropolis of Chengdu to curb Covid. The latter step amplified worries about the commodity demand outlook.

Also read| US stocks: S&P 500 snaps four-session losing streak with payrolls on deck

Here are some key events to watch this week:

ECB Governing Council members due to speak at event Tuesday through Sept. 2
US nonfarm payrolls, Friday
UK leadership ballot closes Friday. Winner announced Sept. 5

Some of the main moves in markets:

Stocks
S&P 500 futures fell 0.1% as of 10:13 a.m. in Tokyo. The S&P 500 rose 0.3%
Nasdaq 100 futures were steady. The Nasdaq 100 was little changed
Japan’s Topix index dropped 0.6%
Australia’s S&P/ASX 200 index fell 0.1%
South Korea’s Kospi index added 0.4%

Currencies
The Bloomberg Dollar Spot Index fell 0.1%
The euro was at $0.9955, up 0.1%
The Japanese yen was at 140.04 per dollar, up 0.1%
The offshore yuan was at 6.9140 per dollar

Bonds
The yield on 10-year Treasuries rose one basis point to 3.26%
Australia’s 10-year bond yield was at 3.68%

Commodities
West Texas Intermediate crude rose 1.3% to $87.73 a barrel
Gold was at $1,697.58 an ounce