Southeast Asian stock markets fell on Friday, wrapping up the week with losses, as US Treasury yields hit a more than seven-year high after robust economic data and hawkish comments from Federal Reserve officials stoked concerns of faster-than-expected interest rate hikes.
The yield on 10-year Treasury bonds on Thursday hit its highest level since May 2011 on expectations that Friday's payrolls report would be stronger than expected, thereby strengthening the Fed's case for an interest rate hike.
Higher US yields are not favourable for emerging markets, as they tend to draw away foreign funds while pressuring local currencies.
Investors are expected to scour the US government's September payroll report scheduled for release on Friday and look closely for signs of wage growth, which could fan concerns about inflation.
A Reuters poll showed non-farm payrolls likely increased by 185,000 jobs after rising 201,000 the previous month, with unemployment rate seen falling to an 18-month low of 3.8%.
The Stock Exchange of Thailand index dropped 8.88 points or 0.51% to close at 1,720.52, in turnover worth 46 billion baht. The Thai market ended the week 1.9% down.
The Philippine index ended 0.2% lower weighed down by industrials. The index posted a 2.7% decline on week, its fifth straight weekly fall.
Earlier in the day, data showed the country's inflation rose for a ninth straight month in September, hitting a near-decade high of 6.7%, although coming in slightly lower than the 6.8% forecast in a Reuters poll.
Conglomerate JG Summit Holdings declined 3.4% and SM Investments Corp fell 0.6%.
Singapore shares slipped 0.7% as Oversea-Chinese Banking Corporation declined 0.9% and Jardine Matheson Holdings slipped 0.4%. The city-state's benchmark index is down 1.5% this week.
The country's central bank on Friday said it would issue its semiannual policy statement on Oct 12. As per a Reuters poll, the bank is expected to tighten it's monetary policy.
Malaysia's benchmark index fell 0.7% to a seven-week closing low and ended the week 0.9% lower.
Government data showed the country's exports fell in August for the first time in six months, hit by declining shipments of palm oil and slowing demand from the United States.
Indonesian shares slumped 4.1% this week.