Despite advances on Wall Street, Asian stocks fell on Friday as the Delta strain of the coronavirus expanded across the region, raising concerns about the region’s economic recovery.

Uncertainty regarding Chinese policy has made Asian investors uneasy, however regional indices have recovered some of the losses suffered last week as a result of Beijing’s crackdowns on the technology and education sectors.

On Friday, MSCI’s broadest index of Asia-Pacific equities outside Japan declined 0.25 percent, led by Chinese blue chips, which sank 0.87%, and Korea, which fell 0.35%.

The Nikkei 225 index in Japan increased by 0.26%.

“There are two main drivers of volatility in the market this week, firstly everything surrounding the Chinese regulatory drive…and secondly the severity of Delta outbreaks around the region,” said Carlos Casanova, senior economist Asia at UBP.

“International investors are still wrapping their head around what happened in the education sector (in China). I expect that will continue to drive sentiment. The regulatory drive is not over yet, it should continue to be a factor in the next three to six months or so,” he said.

China on Friday reported 124 confirmed cases for Aug. 5, its highest daily count for new coronavirus cases in the current outbreak, fueled by a surge in locally transmitted infections. Authorities have imposed travel restrictions in some cities.

Thailand and Malaysia both reported record daily cases on Thursday.

“The Delta variants exposed the vulnerability of Asian economies as the overall vaccination rate is low in Asia,” wrote analysts at Bank of America in a note.

This is weighing on shares in Asia and while the MSCI Asian benchmark is up 1.6% this week, it is still down just over 10% from all time highs hit in February.

In contrast, the MSCI world shares index is just shy of a record high, which it hit on Wednesday.

Elsewhere in the region, PT Bukalapak.com Tbk an Indonesian e-commerce company backed by Ant Group and Singapore sovereign fund GIC [RIC:RIC:GIC.UL], rose nearly 25% on its market debut after raising $1.5 billion in the country’s biggest initial public offering.

U.S. stock futures, the S&P 500 e-minis , were down 0.05%, while Euro Stoxx 50 futures were down 0.08% and FTSE futures were down 0.04%.

The Nasdaq and S&P 500 closed at record levels on Thursday after a spate of strong corporate earnings and a further decline in U.S. unemployment claims. Eyes are now on the jobs report for July due in the U.S. session.

Treasury yields extended their gains in Asian hours, having earlier been helped by the healthy jobless claims report.

Benchmark 10-year Treasury note yields rose to 1.2366% approaching a week high, compared with its U.S. close of 1.217% on Thursday.

This had a knock-on effect for the dollar, which rose against the yen to a week high.

The stronger dollar and potential for higher yields hurt gold. The spot price fell 0.23% to $1,799.6.

Oil paused for breath in Asian trading on Friday, but US crude was set for its biggest weekly loss since October after falls earlier in the week due to rising COVID-19 cases and a surprise build in U.S. crude stockpiles.

U.S. crude was $69.2 a barrel, up 0.16%. Brent crude was $71.39 per barrel, up 0.22%.

Ether , the world’s second largest cryptocurrency dropped 2% a day after a major software upgrade to its underlying ethereum blockchain, which is expected to stabilise transaction fees and reduce supply of the token.