SYDNEY - Asian shares held their breath on Friday ahead ​of US jobs data that could prove pivotal for next month's interest-rate decision by the Federal Reserve, while rising ‌oil prices served as a reminder that Middle East tensions remain far from resolved.

MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.1 percent and was down 0.5 percent for the week. Japan's Nikkei dropped 0.5 percent although it was set for a weekly rise of 1.7 percent.

South Korea's KOSPI also fell 0.5 percent and was down 5.1 percent for the week for ​a seventh straight week of declines. The index had doubled in the first half of the year, swept up by ​the blistering demand for AI-linked chip stocks.

After bouts of volatility sparked by concerns over the durability of the AI-driven rally, investors are now squarely ​focused on the US payrolls report due later in the day, which could prove crucial for the interest-rate outlook. Forecasts are centered on ​a rise of 80,000 jobs for July after a 57,000 gain in June, with the unemployment rate forecast to hold steady at 4.2 percent.

The stakes are high as markets cannot seem to make up their mind about how the Federal Reserve might move next month, with a rate hike seen as a coin toss.

"With yields ​and inflation still the key risks for stocks, we expect Friday's NFP to trade as a 'good news is bad news' print," said Michael ​Feroli, chief US economist at JPMorgan, adding that a strong jobs number would reinforce higher-for-longer pricing and put upward pressure on rates.

Conversely, equities may respond positively ‌to ⁠a soft payrolls report as yields ease and policy expectations shift toward a dovish path, added Feroli.

Nasdaq futures inched up 0.1 percent while S&P 500 futures were flat. European bourses are set for a lower open, with pan-region stock futures down 0.2 percent.

Oil climbs again

Brent crude futures ​gained 1.5 percent to $83.78 a barrel, after jumping 3.8 percent ​overnight. They were, however, still ⁠set for a weekly loss of 7 percent and remained well off their recent peak of $102 a barrel two weeks ago.

Higher oil prices lifted Treasury yields. The two-year note yield held at 4.2496 percent in Asia, after rising 7 basis points overnight, while the 10-year yield steadied at 4.6821 percent, having gained 5 bps overnight.

The dollar was steady in Asia on Friday after bouncing overnight.

Against the Japanese yen, ⁠the dollar ​traded at 158.38 yen, after rising 0.4 percent overnight to break above the 200-day average ​of around 158. The US jobs report could decide the next moves in the yen after last week's historic currency market intervention from Japan and the US sparked a sharp ​rally.

Spot gold rose 0.7 percent to $4,268 an ounce, while spot silver rose 1.3 percent to $62.29 an ounce.