• Asian shares experienced tentative gains as Treasuries found support.
• The U.S. tax bill's passage raises concerns about a $3.8 trillion increase in debt.
• Global business activity showed improvement, although European markets declined.

Asian shares made some tentative gains on Friday as beaten-down Treasuries found buyers after U.S. President Donald Trump's tax bill narrowly passed the lower house, although debt worries still lingered. Overnight, PMI data around the globe showed U.S. business activity picked up pace in May, which supported Wall Street before selling pressures left it largely flat. In contrast, weak economic activity in Europe dragged shares lower, according to The Jakarta Post, Reuters, and Channel News Asia.

The Republican-controlled U.S. House voted by a slim margin to pass Trump's tax cut bill, fulfilling several of his campaign pledges. However, this is expected to increase the $36.2 trillion U.S. debt pile by $3.8 trillion over the next decade. Treasury yields have climbed amidst worries about U.S. fiscal health leading up to the bill's passage, intensified by Moody's recent downgrade of the U.S. credit rating due to rising debt concerns. Nevertheless, the 30-year bonds found some buyers overnight, with their yields recently dropping to 5.037 percent, moving away from a 19-month peak of 5.161 percent earlier in the session, according to The Jakarta Post, Reuters, and Channel News Asia.

Ken Crompton, senior interest rate strategist at the National Australia Bank, noted, “Maybe the certainty of getting something through has been enough to alleviate some of the fear, panic in the market, but as well as that, it is not unusual in big moves for there to be a bit of overshoot.” He further emphasized that there appears to be no indication of meaningful reductions in U.S. bond issuance or significant concerns about broader global bond supply. The yields on super-long Japanese government bonds held near all-time highs, with 30-year yields significantly rising this week, according to Reuters and Channel News Asia.

The MSCI's broadest index of Asia-Pacific shares outside Japan rose by 0.1 percent, although it still faces a weekly loss of 0.4 percent after five weeks of gains. Major markets like Chinese blue chips and Hong Kong's Hang Seng remained largely unchanged while Japan's Nikkei index increased by 1 percent following data indicating Japan's core inflation relative to the previous year had accelerated at its fastest pace in more than two years. This data further signifies the ongoing economic adjustments within Asia, according to Reuters, Channel News Asia, and The Jakarta Post.

In currency markets, the dollar is set to face a weekly drop of 1.2 percent against its major peers, while the euro is nearing its first weekly rise after four consecutive weeks of declines, advancing by 0.2 percent. Furthermore, U.S. Federal Reserve Governor Christopher Waller remarked that he still sees a path to potential rate cuts later this year, dependent largely on the status of Trump’s tariff policy. Bitcoin is also projected to gain 7 percent weekly, resting at $111,524 and having hit a record high of $111,965 just a day prior. Meanwhile, U.S. crude futures and Brent oil prices have declined amidst prospects of increased output from OPEC+ countries, according to Channel News Asia, Reuters, and The Jakarta Post.