Major Asian stock markets closed lower on Thursday following an overnight slip on Wall Street after the closely-watched 10-year Treasury yield touched its lowest in more than a year.
Mainland Chinese stocks were also lower on the day, as the Shanghai composite fell 0.92 percent to 2,994.94 and the Shenzhen component declined 0.65 percent to 9,546.51. The Shenzhen composite also shed 0.905 percent to 1,639.72.
Over in Hong Kong, the Hang Seng index was about 0.2 percent higher in its final hour of trading. Hong Kong-listed shares of China Construction Bank declined around 1 percent after the company posted its first quarterly profit drop since 2015.
Chinese telecommunications equipment maker ZTE, on the other hand, saw its Hong Kong-listed stock surge 10.05 percent after the company forecast a jump in its first quarter profit. ZTE, the world's fourth-largest telecommunications equipment maker by market share, was forced to stop most business between April and July last year due to U.S. sanctions.
South Korea's Kospi shed 0.82 percent to close at 2,128.10 as shares of industry heavyweight Samsung Electronics declined 1.1 percent. Australia's , on the other hand, rose 0.65 percent to close at 6,167.10.
The broader MSCI Asia-ex Japan index rose 0.15 percent to 523.86, as of 3:28 p.m. HK/SIN.
Overnight on Wall Street, the Dow Jones Industrial Average slipped 32.14 points to close at 25,625.59 and the shed 0.5 percent to finish at 2,805.37. The Nasdaq Composite closed 0.6 percent lower at 7,643.38.
The declines came as the benchmark 10-year rate hit its lowest level since Dec. 15, 2017. It was last at 2.3611 percent after seeing levels above 2.4 percent yesterday.
Investors are keeping an eye on rates after the 10-year fell below the 3-month rate last week for the first time since 2007. It is a development that investors call an inverted yield curve and is seen as an early indicator of a recession.
"The reason why it is so accurate is because when short term rates exceed long time rates, it is telling us that investors are worried about the near term outlook for the economy and want to be compensated more for tying up their money during this time," Kathy Lien, managing director of foreign exchange strategy at BK Asset Management, wrote in an overnight note.
"Investors are having a hard time deciding whether the drop in yields is positive or negative for stocks," Lien said. "On the one hand, lower rates are good for borrowing but on the other, the yield curve inverted as a result of falling interest rates."
On the U.S.-China trade front, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are set to engage in trade negotiations Chinese Vice Premier Liu He on Thursday night in Beijing, according to China's commerce ministry.
Ahead of the meeting, Reuters reported that the Chinese side made unprecedented proposals on issues such as forced technology transfer, citing U.S. officials.
"I think this time around ... the context is different," Chou Chong, head of Asia equity at Ostrum Asset Management Asia, told CNBC's "Street Signs" on Thursday. "The bag of tricks or what you call the easy hanging fruits that China had — global trade, people buying more goods — that's kind of running out a bit."
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 96.855 after seeing an earlier high of 96.976.
The Japanese yen traded at 110.16 against the dollar after seeing lows around 110.6 in the previous session. The Australian dollar changed hands at $0.7104 as it attempted to recover from a steep decline yesterday, where it fell from the $0.714 handle.
Oil prices declined in the morning of Asian trading hours, with the international benchmark Brent crude futures contract slipping 0.31 percent to $67.62 per barrel and U.S. crude futures falling 0.42 percent to $59.16 per barrel.
— Reuters and CNBC's Fred Imbert contributed to this report.