By Stella Qiu

SYDNEY (Reuters) – Asian markets began a potentially pivotal month cautiously, with most shares lower and Treasury yields close to three-month highs on Friday, as investors awaited U.S. payrolls data, with a rate cut anticipated next week.

Investors are looking forward to Friday's nonfarm payrolls report, alongside Tuesday's U.S. presidential election and the Federal Reserve's policy meeting the following day.

Oil prices continued to rise, with Brent up nearly 2% at $74.13 a barrel, following reports of Iran preparing a retaliatory strike on Israel from Iraqi territory.

After a sell-off overnight, Nasdaq futures climbed 0.3% owing to a 5.3% surge in Amazon (NASDAQ:AMZN), which added $104 billion in market cap after reporting third-quarter profits exceeding Wall Street expectations, fueled by strong retail sales.

Intel (NASDAQ:INTC) also buoyed the market with optimistic revenue projections, sending its shares up 7% after market close.

In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.3%, down 1.9% for the week. Japan's Nikkei fell 2.1% due to a stronger yen, which impacted the outlook for Japanese exporters, holding at 152.06 per dollar after gaining around 1% overnight as Bank of Japan Governor Kazuo Ueda’s less dovish remarks hinted at a potential year-end rate hike.

China's blue chips gained 0.1% while Hong Kong's Hang Seng index rose 0.4% on reports of China's factory activity returning to expansion in October.

Shares of Meta Platforms (NASDAQ:META) dropped 4% and Microsoft (NASDAQ:MSFT) fell 6%, despite both firms exceeding earnings estimates, due to concerns that the rise of artificial intelligence may affect their profitability.

Barring significant surprises in the U.S. payrolls report, a quarter-point rate cut by the Fed is deemed highly probable, with 94% likelihood following data indicating ongoing healthy U.S. consumption and easing inflation pressures.

Economists predict a job addition of 113,000 in October, though risks trend toward the upside, as private sector surveys suggest strong job growth and jobless claims came in lower than anticipated. Goldman Sachs predicts just 95,000 jobs, with TD Securities projecting only a 70,000 increase.

TD Securities analysts remarked, "Hurricanes and the Boeing (NYSE:BA) strike are the name of the game in October, and we expect this combination of shocks to heavily distort this month's jobs figures. However, high-frequency data indicated a slower hiring pace compared to September."

In the forex market, the pound remained close to 2-1/2 month lows at $1.2891, with British bond yields rising as investors reacted to the UK government’s new budget indicating elevated inflation, resulting in a slower rate-cut schedule by the Bank of England.

Treasury yields stayed near three-month highs, with two-year yields rising 7 basis points this week to 4.1702%, just below the three-month high of 4.2180%, while benchmark 10-year yields increased by 5 basis points this week to 4.2840%.

Gold prices dipped 1.5% overnight but stabilized at $2,745.69 per ounce.