Asia Markets Slide on Tech Sell-Off, AI Valuation Concerns and Sticky Japan Inflation
Asia-Pacific equities tumbled on Friday, extending Wall Street’s tech-driven sell-off amid growing worries over lofty AI-related valuations. Major benchmarks fell sharply: Japan’s Nikkei 225 dropped 1.2%, Hong Kong’s Hang Seng slid 1.7% and China’s Shanghai Composite lost 1.1%. A lacklustre U.S. JOLTS report failed to clarify the Federal Reserve’s rate path, stoking uncertainty in global markets. Japan underperformed after data showed core inflation remains above the Bank of Japan’s 2% target, keeping pressure on the yen, which hovered near 151 against the dollar. In China, concerns over property-sector debt and weak industrial output weighed on local shares. Commodities saw mixed moves: Brent crude edged down 0.8% while gold gained 0.5% on safe-haven demand. Bitcoin (BTC) mirrored broader risk aversion, slipping 2% to trade below $35,000. Traders will now look to next week’s Fed meeting minutes and upcoming corporate earnings for fresh market direction.
Bearish
The tech-led correction and AI valuation fears have triggered broad risk-off sentiment, dragging equities and crypto lower. Similar sell-offs in 2022 saw Bitcoin decline alongside major stock indexes as traders unwound leveraged positions. Japan’s stubborn inflation adds FX volatility, compounding market jitters. In the short term, elevated volatility and tighter financial conditions could keep selling pressure on crypto assets. Over the long term, price action will hinge on Fed policy clarity and renewed risk appetite, but the immediate outlook remains bearish.