Asian Stocks Down on Fears of Rate Hikes : Markets: Tokyo, Bangkok, other exchanges open lower on worries U.S. economic growth will spur action by Fed.

Asian stock markets were lower in afternoon trading today after an upbeat U.S. employment report released Friday rekindled concern that the Federal Reserve will raise short-term rates again to keep inflation in check.

Far East investors’ reaction deepened worries that U.S. stocks will dive today. Most U.S. markets were closed on Good Friday, leaving domestic investors three days to contemplate their next moves.

In afternoon trading in Tokyo, the Nikkei stock index was off 269.46 points, or 1.4%, to 19,007.70.

In Bangkok, the SET stock index was down 33.26 points to 1,199.27 in midday trading, while Kuala Lumpur’s composite index was off 15.70 points to 944.24.

Hong Kong, Sydney and several other Asian markets were closed for holidays.

There were other signs that U.S. stocks could plunge early today. In Tokyo trading at midday, futures contracts on the Standard & Poor’s 500 stock index were down about 11 points from last Thursday’s close, to 435.80. That represents a 2.5% drop in the S&P; index, or about the same as a 90-point decline in the Dow Jones industrial average.

Still, individual investors in the United States appeared to be generally calm over the weekend. Major mutual fund companies, such as Fidelity Investments, said weekend calls to place Monday sell orders or to ask for advice weren’t much above normal weekend levels.

The U.S. stock market had plunged last Monday through Wednesday, reacting to rising bond yields. Last Thursday, the stock market rallied a bit, raising hopes that bearish sentiment was ending.

Then came Friday’s U.S. Labor Department report that the economy last month created 456,000 new jobs, the biggest gain in more than six years.

Some bond trading was conducted Friday even though stock markets were closed, and bond traders immediately registered their shock at the huge employment gain: The yield on the benchmark 30-year Treasury bond zoomed to its highest levels in 14 months, to 7.26% from 7.08% Thursday.

Unless market interest rates pull back sharply early today, before the U.S. stock market opens, most analysts believe stocks will plummet to reflect the bond market’s selloff--and the expectation that the Federal Reserve will quickly boost short-term interest rates again, in an attempt to moderate the economy’s growth.

The Fed has raised short rates twice since Feb. 4, most recently to 3.5% from 3.25% on March 22.

At midday today in Tokyo, the U.S. bond futures were trading at yield levels right around 7.26%.

Japanese bond yields rose at the start of Tokyo trading as traders reacted to the jump in U.S. yields Friday.

Bond futures for June delivery, currently the active futures contract, were down 0.25 yen at 111.85 yen. The yield on the benchmark No. 157 10-year government bond was 3.925%, up 0.06 points.

“With U.S. yields at 7.26%, we can’t say there won’t be an effect on Japanese bonds,” said Mikinao Matsushita, a fund manager at BOT Asset Management, a unit of the Bank of Tokyo.

“The influence of the U.S. bond price fall, however, will be limited,” Matsushita said. “Actions by the Bank of Japan and movements in the currency market could divert attention away from the U.S.”

Meanwhile, the dollar was a beneficiary of the surge in bond yields on Friday. After falling to as low as 102.13 yen last Thursday, the dollar was trading at 104.10 yen in Tokyo early today.

As for Japanese stocks--which had surged in the first quarter, even as most world markets fell--”the immediate knee-jerk reaction is to hold off on all equity investment until the sky is clear on Wall Street,” said Ravi Nandigum, a salesman at Baring Securities.

“Once the market starts stabilizing there, we will start to see money coming back to Japan but in the meantime, we’ll see cautious trading.”