TOKYO (AP) — Asian shares were mostly higher Friday after Wall Street benchmarks fell on worries that the U.S. Federal Reserve will keep raising interest rates.

Markets rose in Japan, Australia, South Korea and China in muted trading. Oil prices gained $1 a barrel.

Hot readings on the U.S. jobs market Thursday got traders thinking the Fed will need to keep inflicting pain on the economy to fight surging prices. Inflation has been easing from a peak of 9.1% in June to 7.1% in November and investors have been hoping for signs that could prompt the Fed to ease up on applying the brakes to the economy with high interest rates. Those hopes have been dashed so far.

The strong labor market reports set the stage for the release on Friday of the Labor Department’s snapshot of hiring in December.

“Overall risk sentiments could lean more toward a wait-and-see in the lead-up to the U.S. job report later, lacking a clear conviction in market direction from Wall Street over the past few days,” Yeap Jun Rong, market analyst at IG, said in a report.

Japan’s benchmark Nikkei 225 rose 0.4% in morning trading to 25,921.79. Australia’s S&P/ASX 200 added 0.5% to 7,099.30. South Korea’s Kospi gained 0.7% to 2,280.14. Hong Kong’s Hang Seng edged up 0.2% to 21,083.92, while the Shanghai Composite rose nearly 0.2% to 3,160.04.

Analysts expect economic growth in Asia to slow this year, although China’s easing of COVID-19 restrictions is expected to be a plus.

On Thursday, the S&P 500 fell 1.2% to 3,808.10. The Dow dropped 1% to 32,930.08. The Nasdaq slid 1.5% to 10,305.24. The Russell 2000 index fell 1.1% to 1,753.19.

Technology, health care and industrial stocks weighed most on the market. Microsoft fell 3%, UnitedHealth Group slid 2.9% and Honeywell International lost 2.7%.

Payroll company ADP reported a bigger-than-expected increase in jobs at private companies last month. The U.S. government reported the number of Americans applying for unemployment benefits fell to the lowest level in more than three months last week.

On Wednesday, a government report showed a higher than expected number of job openings in November.

The upcoming Labor Department snapshot of hiring in December is a closely watched figure that typically has come in stronger-than-expected when following a robust ADP jobs report, according to Brad McMillan, chief investment officer for Commonwealth Financial Network.

“The real question for investors tomorrow will be whether the economy continues to grow faster than expected — and faster than the Fed wants — or will it stay in a sweeter spot with continued moderate growth,” he wrote Thursday. “The data suggests the former.”

A strong jobs market exerts upward pressure on wages and reaffirms the central bank’s determination to keep interest rates high to slow economic growth and tame inflation. The strategy, though, risks going too far bringing on a recession.

The Fed’s benchmark lending rate stands at a range of 4.25% to 4.5%, up from close to zero following seven increases last year. It has forecast that the rate will reach a range of 5% to 5.25% by the end of 2023 and it isn’t calling for a rate cut before 2024.

Meanwhile, Wall Street is looking ahead to the latest round of corporate earnings to get a better a sense of how companies are handling hot inflation and weakening consumer demand. Companies in the S&P 500 will pick up the pace of reporting in a few weeks, but some results are already trickling in.

French fry maker Lamb Weston rose 9.8% and Hunt’s ketchup maker Conagra rose 3.4% after reporting strong results for their most recent quarters. Constellation Brands, which markets Corona beer and Robert Mondavi wine, fell 9.7%, the largest drop among S&P 500 stocks, after the company trimmed its profit forecast for the year.

Bed Bath & Beyond slumped 29.9%, its biggest slide in nearly two years, after the already struggling home goods retailer warned investors that it may need to file for bankruptcy.

Energy stocks bucked the broader market slide as the price of U.S. crude oil settled 1.1% higher. Exxon Mobil rose 2.2%.

Early Friday, benchmark U.S. crude added $1.02 to $74.69 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international pricing standard, rose $1.04 to $79.73 a barrel.

In currency trading, the U.S. dollar climbed to 133.89 Japanese yen from 133.40 yen. The euro cost $1.0533, little changed from $1.0524.

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AP Business Writers Damian J. Troise and Alex Veiga contributed to this report.

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Yuri Kageyama is on Twitter https://twitter.com/yurikageyama