(Bloomberg) — Stocks in Asia fell Friday after data from China showed fresh economic weakness and traders reassessed the path forward for US interest rates.

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A gauge of the region’s equities declined for the first time in six sessions as stocks in mainland China, Australia and South Korea declined, while Japanese shares rose.

The moves followed a lackluster day on Wall Street and further signs of stress in the world’s second-largest economy. Home sales in China fell in April at a faster pace than the prior month and consumption unexpectedly slowed, providing a new warning sign for the economy.

“A-share investor sentiment dropped notably versus the prior week,” Morgan Stanley strategists led by Laura Wang said in a Friday note. “Weak credit and inflation data, as well as the US tariff hike announcement, renewed investor concerns regarding weak macro conditions and ongoing geopolitical friction.”

Hong Kong’s Hang Seng Index swung between gains and losses near a nine-month high, as robust results supported Alibaba Group Holding Ltd. and Baidu Inc. US equity futures were little changed after a small decline for the S&P 500 and Nasdaq 100 on Thursday.

The yen weakened against the dollar after news the Bank of Japan left bond buying amounts unchanged. One former BOJ chief economist suggested the central bank may raise interest rates three more times this year, with the next move coming as early as June, given its easy policy settings.

Treasuries were little changed in Asian trading, while Australian and New Zealand yields climbed, tracking moves in US government bonds on Thursday. A gauge of greenback strength rose, while the offshore yuan weakened against the dollar.

Traders will be focused on signs of further support for China’s property sector, including a potential plan to clear excess inventory, according to media reports. Key officials will meet Friday morning to discuss such a plan, according to people with knowledge of the matter.

“The key issue facing China’s recovery this year is ‘complacency risk’ — the danger that Beijing will be content with growth that looks decent in terms of real GDP growth (driven by strong production data) but is weaker in terms of nominal growth (due to deflationary pressures) and the economic conditions facing firms and households,” Michael Hirson of 22V Research said.

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An auction of 30-year Chinese government bonds attracted around four times the amount of demand relative to the debt on offer.

Caution in risk assets reflected a repricing of Federal Reserve rate cut expectations in the swaps market. Traders had increased expectations from one cut in 2024 to two following Wednesday’s consumer price index data. On Thursday, those bets retreated, leaving just one cut fully priced in this year.

“There is a lot of leeway for the stock market if we do see a short-term pullback soon,” said Matt Maley at Miller Tabak + Co. “Put another way, the bulls are still fully in charge right now, and so it will take a significant reversal to stem the tide of the upside momentum.”

Higher for Longer

Three Federal Reserve officials said the central bank should keep borrowing costs high for longer as policymakers await more evidence inflation is easing, suggesting they’re not in a rush to cut interest rates.

Cleveland Fed President Loretta Mester, New York Fed President John Williams and Richmond Fed President Thomas Barkin, speaking separately Thursday, argued it may take longer for inflation to reach their 2% target.

Commodities were broadly higher. West Texas Intermediate climbed early Friday, on pace for a third day of gains. Gold was little changed after a Thursday drop. Bitcoin traded above $65,000 after halting a decline in the prior session.

Key events this week:

Some of the main moves in markets:

Stocks

• S&P 500 futures were little changed as of 1:22 p.m. Tokyo time

• Japan’s Topix rose 0.2%

• Australia’s S&P/ASX 200 fell 0.8%

• Hong Kong’s Hang Seng rose 0.3%

• The Shanghai Composite fell 0.1%

• Euro Stoxx 50 futures fell 0.4%

Currencies

• The Bloomberg Dollar Spot Index rose 0.2%

• The euro was little changed at $1.0858

• The Japanese yen fell 0.2% to 155.74 per dollar

• The offshore yuan fell 0.1% to 7.2312 per dollar

Cryptocurrencies

• Bitcoin rose 0.5% to $65,584.01

• Ether rose 0.6% to $2,955.26

Bonds

• The yield on 10-year Treasuries was little changed at 4.37%

• Japan’s 10-year yield advanced two basis points to 0.940%

• Australia’s 10-year yield advanced two basis points to 4.20%

Commodities

This story was produced with the assistance of Bloomberg Automation.

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