Key facts
- Asian shares declined, led by chipmakers like SK Hynix and Samsung Electronics.
- South Korea's KOSPI fell 2.7%, extending a previous slide after a strong Q2 driven by AI chip demand.
- Japan's Nikkei dropped 1.1%, while Hong Kong's Hang Seng gained 1.8%.
- Investors are awaiting the U.S. nonfarm payrolls report, expected to show 110,000 jobs added in June.
- Treasury yields have climbed in anticipation of strong U.S. jobs data, potentially influencing Fed rate hike expectations.
- Oil prices hit a four-month low, and the yen traded near a 40-year low against the dollar.
Asian shares declined on Thursday as investors rotated out of chipmakers, while currency and bond markets braced for U.S. jobs data that could signal interest rate hikes. Oil prices hit new four-month lows.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.8%, and Japan's Nikkei dropped 1.1%. South Korea's KOSPI sank 2.7%, extending a previous slide, following a significant surge in the second quarter driven by AI-related demand for memory chips. SK Hynix plunged 7.7% and Samsung Electronics tumbled 6.2%. Hong Kong's Hang Seng bucked the trend with a gain of 1.8%.
Foreign investors sold Asian equities at the fastest pace in at least 16 years in the first half of 2026. Investor attention is focused on U.S. non-farm payrolls data due Thursday, with economists expecting a rise of 110,000 jobs for June. Federal Reserve Chair Kevin Warsh indicated that inflation risks have eased but reiterated commitment to the 2% inflation target, while markets price in about 80% odds of a rate hike in September. Treasury yields rose as traders anticipated strong jobs data.
The euro dipped 0.4% overnight against the greenback after European Central Bank President Christine Lagarde's comments, and the yen was little changed at 162.59 per dollar, having hit a fresh 40-year low. Gold bounced 0.5% to $4,050 an ounce.