Most Asian equities moved lower on Thursday as technology stocks resumed their slide, weighed down by lingering concerns over stretched artificial intelligence valuations. Expectations of a more hawkish Bank of Japan also added pressure across the region.
Regional markets followed an overnight decline on Wall Street, where technology shares suffered heavy losses. However, upbeat earnings guidance from U.S. memory chipmaker Micron, released after the market close, helped limit broader downside.
S&P 500 futures were up 0.1% by 20:59 ET (01:59 GMT), supported by a jump of more than 7% in Micron Technology shares. Still, gains remained modest as investors stayed cautious ahead of key U.S. consumer price index data due later in the day.
Japanese stocks retreat as BOJ rate hike expectations build
Japanese equities underperformed, with the Nikkei 225 falling 1% and the broader TOPIX index down 0.3%.
Market sentiment weakened as investors increasingly priced in an interest rate hike from the Bank of Japan at the conclusion of its two-day policy meeting on Friday.
Expectations of tighter policy have grown amid persistent yen weakness and stubborn domestic inflation, both of which the BOJ has indicated it aims to address. Recent comments from central bank officials also suggested that a rate increase would be discussed during the meeting.
Adding to the focus, Japan’s consumer price inflation data for November is scheduled for release ahead of the BOJ decision.
Asian tech stocks slide amid AI valuation concerns
Technology shares across Asia broadly declined, as skepticism continued to surround elevated valuations fueled by the artificial intelligence boom.
South Korea’s KOSPI was the weakest major market in the region, dropping 1.3%, while Hong Kong’s Hang Seng Index slipped around 0.3%.
In Taiwan, chipmaking heavyweight TSMC edged down 0.4%. Losses in South Korean memory chip leaders SK Hynix and Samsung Electronics were relatively contained, helped by positive signals from Micron’s outlook.
Despite this, investor appetite for tech stocks remained subdued. Concerns persist that AI-driven valuations have become overheated following strong gains over the past two years, prompting ongoing profit-taking.
Caution around U.S. monetary policy also weighed on sentiment. Growing expectations that the Federal Reserve will keep interest rates unchanged in January have pressured technology shares in recent weeks.
Mixed performance across broader Asian markets
Elsewhere, China’s CSI 300 index fell 0.7%, while the Shanghai Composite ended flat. Chinese stocks have seen sharp swings recently amid speculation over potential new stimulus measures from Beijing, particularly after a series of weak economic data releases for November.
Australia’s ASX 200 slipped 0.2%, while Singapore’s Straits Times Index was largely unchanged. Futures for India’s Nifty 50 edged slightly higher after recent declines driven by concerns over slowing economic growth and trade-related headwinds.
