HONG KONG (AP) — Asian stocks were mostly lower Friday morning, with Japan’s benchmark Nikkei index losing more than 2 percent in early trading after a sharp decline on Wall Street driven by high expectations.

US futures and oil prices were higher.

Japan’s benchmark Nikkei 225 fell 2.3 percent in morning trade to 38,196.53. Thursday, the Bank of Japan announced that it would keep the key rate unchanged at 0.25%, which was in line with market expectations. The Japanese yen traded lower on Friday. The dollar rose to 152.35 Japanese yen from 152.00 yen.

China’s markets were an exception to Friday’s bearish vibe. Hong Kong’s Hang Seng rose 1.0 percent to 20,526.69 and the Shanghai Composite rose 0.4 percent to 3,294.55.

Factory activity in China returned to growth in October, with the official manufacturing purchasing managers’ index released on Thursday reaching 50.1, ending five consecutive months of contraction. Another private survey on Friday also showed a reading of 50.3, above the 50 expansion line.

Australia’s S&P/ASX 200 fell 0.8 percent to 8,093.80 after its third-quarter producer price index rose 3.9 percent year-on-year, a return to annual growth below 4, 0% for the first time since September 2023, according to data from the Australian. Bureau of Statistics.

Elsewhere, South Korea’s Kospi was basically unchanged at 2,556.57. Taiwan’s Taiex lost 0.8 percent, weighed down by a 1 percent decline. Taiwan Semiconductor Manufacturing Corp.chip supplier Apple, next Apple’s quarterly earnings report Thursday, which revealed a decline in sales revenue from China.

On Thursday, the S&P 500 fell 1.9% to 5,705.45 for its worst day in eight weeks and fell further from record set in early October. The Dow Jones Industrial Average fell 0.9 percent to 41,736.46, while the Nasdaq composite fell 2.8 percent to 18,095.15 for a second straight loss after setting the most recent record ever.

Microsoft reported higher profit growth for the latest quarter than analysts expected. Its revenue also beat forecasts, but its stock still fell 6 percent as investors and analysts looked for possible disappointment.

Meanwhile, Facebook’s parent company also delivered a better-than-expected profit report. As with Microsoft, that wasn’t enough to push its stock higher. Investors instead focused on Meta Platforms Warning that it expects a “significant acceleration” in spending next year as it continues to pour money into the development of artificial intelligence. It decreased by 4.1%.

The Big Tech crash on the last day of October erased the S&P 500’s gain for the month. The index fell 1 percent for its first monthly decline in six, even as it set an all-time high during that period.

In the bond market, Treasury yields edged lower on a mixed set of reports on the US economy.

A report said a measure of inflation which the Federal Reserve likes to use, fell to 2.1% in September from 2.3%. That’s close to the Fed’s 2 percent target, although the underlying trends — after ignoring food and energy costs — were slightly hotter than economists had expected.

A separate report said growth in workers’ wages and benefits slowed over the summer. This could put less pressure on future inflation.

A third report, meanwhile, said fewer American workers filed for unemployment benefits the previous week. This is an indication that the number of layoffs remains relatively low across the country.

Treasury yields rose and fell several times after the reports before falling. The 10-year Treasury yield fell to 4.27 percent from 4.30 percent late Wednesday. That’s still up sharply from the roughly 3.60% level it was at in mid-September.

In other trade, benchmark U.S. crude gained $1.33 to $70.59 a barrel in electronic trading on the New York Mercantile Exchange.

Brent crude, the international standard, rose $1.23 to $74.04 a barrel.

The euro fell to $1.0878 from $1.0885.

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AP Business Writer Stan Choe in New York contributed.