Asian shares and U.S. Treasury yields slid while the Swiss franc and Japanese yen rose on safety bids on Friday after weaker-than-expected U.S. factory data sparked fears of a worsening economic outlook.

China's sluggish manufacturing sector is poised for a "cruel summer" with two sentiment surveys this week pointing to a new level of gloom among factory owners struggling with poor demand, signalling risks for economic growth in the second half of 2024.

A private-sector survey of purchasing managers from 650 private and state-owned manufacturers published on Thursday found that operating conditions in the sector deteriorated for the first time in nine months as new orders tumbled.

U.S. labor costs increased moderately in the second quarter as private sector wages grew at the slowest pace in 3-1/2 years, more evidence that inflation was firmly on a downward trend and could help facilitate an interest rate cut in September.

Private employers in the U.S. added fewer roles than anticipated in July, with jobs growth edging down as pay gains continued to slow, according to a report from payrolls processor ADP on Wednesday.

Asian shares rallied on Thursday, tracking a huge revival in global tech stocks helped by Meta and Nvidia (NASDAQ:NVDA), while prospects of imminent policy easing in the U.S. boosted global bonds and commodities.

Oil prices rose during Asian trade on Thursday, extending gains from the previous session, after the killing of a Hamas leader in Iran raised the threat of a wider Middle East conflict and concern over its impact on oil.