Oil prices hit new four-month lows, with Brent crude off 0.8 percent to $71 a barrel, as US President Donald Trump said talks with Iran had gone well in Qatar, and as more oil tankers transited through the Strait of Hormuz.

On Thursday, MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.8 percent, while Japan’s Nikkei also dropped 1.1 percent, adding to losses from the first day of the quarter.

South Korea’s KOSPI sank 2.7 percent, extending a 2 percent slide from Wednesday. That followed an eye-watering 68 percent surge in the second quarter on soaring AI-related demand for memory chips.

SK Hynix plunged 7.7 percent and Samsung tumbled 6.2 percent. That followed a report that Meta Platforms is building a cloud business to sell excess AI computing capacity, which sent the Facebook owner's shares up 8.8 percent overnight.

Hong Kong's Hang Seng bucked the trend in Asia with a gain of 1.8 percent.

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Foreign investors sold Asian equities at the fastest pace in at least 16 years in the first half of 2026, as the blistering AI-driven rally forced them to trim their biggest winners in South Korea and Taiwan and hunt for lower-priced laggards.

Investor attention is on US non-farm payrolls data due on Thursday this month due to a holiday on Friday for Independence Day, which falls on a Sunday this year.

Economists polled by Reuters expect a rise of 110,000 jobs for June, but forecasts range widely from gains of 25,000 to 200,000, suggesting the chance for a surprise is high. The jobless rate is forecast to stay steady at 4.3 percent.

"For the equity traders, there is probably no single rigid playbook to work from. Ideally, equity players want a Goldilocks outcome: respectable job creation, a stable unemployment rate," said Chris Weston, head of research at Pepperstone.

"Anything that avoids a marked increase in the implied probability of near-term rate hikes is likely to be welcomed by equity bulls."

At the Sintra Forum, Federal Reserve Chair Kevin Warsh said inflation risks had eased recently, offering only short-lived relief to Treasuries. Warsh also said he will stick firmly to the 2 percent inflation target and "disappoint" anyone who expects loose monetary policy. Markets currently price in about 80 percent odds of a rate hike in September.

Treasury yields have been climbing as traders braced for a potentially strong jobs number, which could see bets of a near-term rate hike ramp up..

US 2-year yields rose 1 basis point (bp) on Thursday to 4.1785 percent, and were up 9 bps this week so far. 10-year yields held at 4.4811 percent after climbing 10 bps this week.

Higher Treasury yields kept the US dollar supported.

The euro dipped 0.4 percent overnight against the greenback after European Central Bank President Christine Lagarde said inflation and growth risks were now becoming more broadly balanced. The euro was steady in Asian hours on Thursday at $1.1379.

The yen was little changed at 162.59 per dollar, having hit a fresh 40-year low of 162.84 on Wednesday.

The slide has drawn the usual warnings of intervention from Tokyo. At the same time, the impact of interventions in April and May proved short-lived, despite Japanese authorities spending almost 12 trillion yen.

Gold bounced 0.5 percent to $4,050 an ounce following a very tough quarter.

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