Asian shares dropped on Friday after surprisingly strong private hiring data in the US roiled Wall Street, pushing down equities as Treasury yields moved sharply higher.

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Stocks fell in Japan, South Korea and Australia, while futures in Hong Kong indicated a slightly smaller decline.

Samsung Electronics Co fell more than 1 percent despite reporting a smaller-than-feared drop in profit that added to signs the memory-chip glut is easing after more than a year of price declines.

US equity futures edged lower Friday after S&P 500 and Nasdaq 100 benchmarks each notched losses of 0.8% on Thursday when ADP Research Institute numbers showed US companies added the most jobs in over a year in June, underscoring the inflationary threat from the strong labor market.

Treasury yields steadied. They had risen across the curve Thursday following the ADP report and data showing the service sector expanded in June at the fastest pace in four months. The policy sensitive two-year rate ended the day just short of 5 percent after touching a 16-year high, while the yield on the 10-year rose to 4.03 percent.

Government bond yields in Australia jumped about 10 basis points for the three- and 10-year maturities, with similar moves in New Zealand.

Currencies were broadly steady in early Asian trading after a gauge of dollar strength touched its highest level in about four weeks Thursday. The yen ticked slightly higher after being the best performer among Group-of-10 currencies in the prior session, supported by comments from the Bank of Japan about a “balanced” approach toward yield curve control.

Meanwhile, swap contracts linked to the Federal Reserve’s future policy decisions almost fully price in a quarter-point interest-rate increase from the US central bank by July 26 and show a growing likelihood of an additional hike by year-end. This expectation for higher rates is reinforcing bets on tighter monetary policy globally as central banks struggle to bring inflation back within targeted ranges.

Dallas Fed President Lorie Logan voiced her concerns on Thursday that inflation was still running too hot and more rate hikes were needed. Stocks have been losing ground in July after a strong first half of the year as continued hawkishness from central banks dampens hopes of a soft landing for the global economy.

Some, however, see the Fed’s 2 percent inflation target as potentially making things worse.

If they don’t reconsider it “in light of what’s happening in the world today, they could really cause some serious problems with both the real estate and the banking markets,” Carol Pepper, chief executive of Pepper International, said on Bloomberg Television. it’s “unrealistic” to be aiming for inflation at such a low level at this point in the cycle, she said.

Traders will be on tenterhooks for Friday’s US nonfarm payrolls and unemployment reports to see if they reinforce or reduce pressure on the Fed to raise rates soon. Economists surveyed by Bloomberg are expecting figures to moderate. Earlier this week, minutes from the Fed’s June meeting showed division among policymakers over the decision to pause rate hikes, with the voting members on track to take rates higher later this month.

Meanwhile back in Asia, investors will be monitoring any stimulus decision by the Chinese government. The country is at a critical stage of economic recovery and industrial upgrading, Premier Li said in an event on Thursday. He pledged to “spare no time” in implementing a batch of targeted policies to strengthen the country’s economic recovery.

Investors in Chinese assets will also be watching the meeting of US Treasury Secretary Janet Yellen and Premier Li Qiang in Beijing for any signs of improvement in the frayed trade ties of the two superpowers.

Elsewhere, oil headed for a second weekly gain after OPEC+ leaders Saudi Arabia and Russia tightened supplies and US crude stockpiles fell. Gold steadied.

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