Chipmaker Slump Depresses Asian Markets While Traders Wait for US Non-Farm Payrolls
In the latest happening, Asian shares extended their losses on Thursday as investors shifted capital away from chipmakers following a highly profitable quarter. Concurrently, currency and bond markets prepared for crucial United States employment data that could signal the direction of future interest rate hikes.
The selloff hit regional markets heavily. The MSCI broadest index of Asia-Pacific shares outside Japan dropped 1.2 percent, while Japan’s Nikkei index lost 1.4 percent. South Korea’s KOSPI sank a dramatic 4.8 percent, compounding a previous two percent slide. This correction followed a massive sixty-eight percent surge in the second quarter fueled by intense artificial intelligence memory chip demand. Consequently, SK Hynix shares plunged 8.5 percent, and Samsung tumbled 7.2 percent. Market analysts attributed the drop to profit-taking and a direct hangover from Wall Street declines. Furthermore, reports that Apple approached restricted Chinese manufacturers for local market devices introduced a serious pricing threat to established Korean and Japanese suppliers.
Global focus rests entirely on the upcoming U.S. non-farm payrolls report. Economists expect a gain of 110,000 jobs, though wide-ranging predictions suggest high chances of a market surprise. Investors hope for steady job growth that avoids increasing the probability of near-term rate hikes. Federal Reserve Chair Kevin Warsh recently noted that inflation risks have eased but affirmed his commitment to a strict two percent target, disappointing expectations for looser monetary policy. Traders currently price in an eighty percent chance of a rate hike in September. This sentiment pushed up U.S. two-year Treasury yields to 4.1806 percent and ten-year yields to 4.4911 percent, providing strong support for the U.S. dollar.
In other markets, Hong Kong’s Hang Seng index bucked the regional trend, gaining 0.9 percent. The dollar slipped slightly to 162.39 yen after hitting a forty-year high. Oil prices touched a new four-month low, with Brent crude dropping to $70.88 a barrel after President Donald Trump noted successful discussions with Iran. Meanwhile, gold rebounded 0.7 percent to $4,059 an ounce.
