Asian Stocks Retreat on Tech Profit-Taking
Asian stocks mostly retreated on Friday as investors locked in recent gains in the technology sector and shifted into more economically sensitive sectors. Japanese and South Korean markets posted significant losses, with chipmaking and artificial intelligence shares extending prior declines. Japanese equities were also pressured by speculation that the Bank of Japan (BOJ) may raise interest rates later this month.
Wall Street Influence and U.S. Payrolls
Regional markets opened with a muted lead from Wall Street, which ended mixed overnight as tech stocks sold off while economically sensitive sectors gained. Nasdaq 100 futures fell nearly 1% in Asian trade, and S&P 500 futures declined 0.5%. Investor focus remained on the upcoming U.S. nonfarm payrolls report for May, which is expected to provide guidance on the world’s largest economy. Uncertainty over the U.S.-Iran war also weighed on sentiment, as little progress has been made toward a comprehensive peace deal amid renewed Middle East hostilities.
South Korea’s KOSPI Slumps on Chip Losses
South Korea’s KOSPI was the weakest performer in Asia, falling as much as 6% due to sharp declines in local chipmakers. Samsung Electronics (KS:005930) and SK Hynix (KS:000660) both dropped over 8%, although they partially recovered later. Markets were also rattled by Labor Minister Kim Young-Hoon’s comments urging major tech firms to share more AI-related profits with suppliers, subcontractors, and workers. Hoon had recently helped broker a pay deal between Samsung and a major union, averting a strike and ensuring substantial payouts to memory chip workers.
Japan’s Nikkei Pressured by Tech Losses and Rate Speculation
Japan’s Nikkei 225 lost 1.6%, weighed down by tech and chip stocks that had previously benefited from optimism over AI. Companies like SUMCO Corp. (TYO:3436), Ibiden Co Ltd (TYO:4062), and Renesas Electronics Corp (TYO:6723) were among the worst performers. The broader TOPIX index remained flat, supported by gains in industrials and consumer sectors.
Markets were further pressured by speculation that the BOJ may hike rates in June, following signals from Governor Kazuo Ueda. Stronger-than-expected wage income data for April suggested the central bank has room to act, with wages and inflation being the main considerations for rate decisions.
Broader Asian Market Performance
Other regional indices were mostly lower. Hong Kong’s Hang Seng fell 0.8% amid tech losses, while China’s CSI 300 and Shanghai Composite remained within a narrow range. Australia’s ASX 200 declined 0.6%, and Singapore’s Straits Times index dropped 0.1%. Futures for India’s Nifty 50 pointed to a flat open ahead of the Reserve Bank of India’s rate decision, where rates are widely expected to remain unchanged amid Middle East-related economic headwinds.
