Key facts
- South Korea's KOSPI index fell over 6%, and the Korean won hit its weakest level against the dollar since March 2009.
- A suggestion from South Korea's Labour Minister for AI companies to share excess profits impacted markets.
- Japan's real wages rose for the fourth consecutive month in April, with earnings and spending beating forecasts.
- Japan's Finance Minister renewed warnings about yen intervention as USD/JPY hovered around 160.
- Hong Kong stocks declined after Beijing tightened cross-border capital outflow controls.
- An explosion occurred near Oman's Mina al Fahal crude terminal, potentially extending conflict risk.
Asian markets closed the week cautiously, with South Korean equities experiencing significant losses. The KOSPI index dropped over 6%, and the Korean won reached its weakest point against the US dollar since March 2009. This decline was partly influenced by a suggestion from South Korea's Labour Minister that AI companies should share excess profits. In Japan, economic data indicated that real wages increased for the fourth consecutive month in April, with nominal earnings and household spending surpassing forecasts. This economic strength supports the Bank of Japan's potential rate hike at its upcoming June 15-16 policy meeting. Japan's Finance Minister Katayama reiterated the government's readiness to intervene in the currency market, as USD/JPY traded around the 160 level. Japanese equities also saw declines, affected by negative sentiment in the tech sector and broader caution around AI-related stocks. Hong Kong stocks fell following intensified controls on cross-border capital outflows by Beijing. Mainland Chinese markets showed more stability, supported by the People's Bank of China's resumption of open market operations. An explosion near Oman's Mina al Fahal crude terminal, suspected to be a drone attack, raised concerns about potential conflict risk extending beyond the Strait of Hormuz. In the US, reports surfaced of senior Trump administration officials discussing with AI companies, including OpenAI, the possibility of the government taking voluntary equity stakes, with early-stage talks underway.