Asian chipmakers drag Nikkei 2.33% lower as US payrolls loom

Investing.com - A sharp rotation out of Asian semiconductor stocks sent the Nikkei 225 down 2.33% to 68,831 on Thursday, while South Korea's KOSPI tumbled as much as 5% as investors unwound AI-hardware bets that had powered a stellar second quarter. SK Hynix plunged 7.7% and Samsung fell 6.2% after Reuters reported that Meta Platforms is building a cloud business to sell excess AI computing capacity to third parties, a development that calls into question the relentless demand thesis for memory chips.

Meta Platforms (NASDAQ: META) sits at the center of that narrative as both a reported catalyst for the rotation and a potential long-term beneficiary if the cloud-resale strategy succeeds, but the near-term read across is clearly negative for the Korean memory names that supply its data centers.

The sell-off was concentrated in tech-heavy markets. China's Shanghai Composite fell 2.03% to 4,028.90, adding to the pressure in North Asia, while MSCI's broadest index of Asia-Pacific shares outside Japan shed 0.8%. Hong Kong's Hang Seng was a notable outlier, closing up 0.76% at 23,055.03, aided by selective buying in consumer and property names that had lagged the AI rally. Australia's S&P/ASX 200 was essentially unchanged at 8,724.50, demonstrating relative resilience given its limited direct exposure to semiconductor supply chains.

The global backdrop for Thursday's session was shaped by two competing forces: a Q2 hangover in chipmakers on one hand, and cautious pre-positioning ahead of the June U.S. non-farm payrolls report on the other. U.S. Treasury yields have climbed through the week in anticipation of the print, with the 2-year yield up 9 basis points on the week to 4.1785% and the 10-year up 10 basis points to 4.4811%. Higher yields kept the dollar broadly supported even as it retreated slightly from its most extreme recent levels.

The yen remains the focal point in currency markets. USD/JPY hovered around 161.24 in Thursday trading, pulling back from Wednesday's fresh 40-year high of 162.84. Japanese authorities have stepped up intervention rhetoric, though Tokyo has not yet been observed transacting in the market. Reuters reported, citing sources familiar with the matter, that officials are abandoning the practice of pre-announcing intervention and instead plan a more calculated campaign designed to squeeze short positions. Investors are treating that ambiguity as reason for caution rather than a green light to push dollar/yen to new extremes.

In Europe, markets have decoupled cleanly from Asia's weakness. The DAX gained 0.44% to 25,179.78, the CAC 40 rose 0.63% to 8,389.71, and the FTSE 100 added 0.48% to 10,528.85 in early trade. India's Nifty 50 outperformed across Asia, adding 0.73% to 24,181.80. Sterling and the euro both firmed: GBP/USD rose 0.53% to 1.3348, while EUR/USD recovered 0.33% to 1.1416 after dipping overnight when ECB President Christine Lagarde said "inflation and growth risks were now becoming more broadly balanced," language that markets initially read as a nudge toward further easing.

Brent crude's decline to around $71 a barrel, off roughly 0.8% overnight after President Trump said Iran talks in Qatar had gone well and more oil tankers cleared the Strait of Hormuz, is providing an additional inflation cushion for European policymakers. Lower energy costs reduce headline CPI pressure, which slightly reduces urgency for the ECB to cut aggressively even as growth concerns persist.

U.S. equity futures reflect the global tech unease without wholesale panic. Nasdaq 100 futures were down 0.43% at 29,963.50 ahead of the open, while S&P 500 futures edged 0.11% lower to 7,535.00 and Dow futures were essentially flat at 52,664.00. The VIX ticked up to 16.78 but remains well below levels that would signal broad market stress, suggesting the chipmaker rotation is being treated as a sector-specific repricing rather than a systemic risk-off move.

The June payrolls report, due later Thursday, will be the day's defining catalyst. Treasury yields have already moved meaningfully in anticipation of a firm print, so a weaker-than-expected number could trigger a sharp unwind in dollar longs and provide relief for USD/JPY. A strong print, conversely, would reinforce the case for the Fed to hold rates steady and could push 10-year yields toward 4.60%, adding to pressure on rate-sensitive tech valuations. Fed San Francisco President Mary Daly is also scheduled to speak in Spain on Thursday, offering another opportunity for the market to calibrate where the Fed stands after this week's yield moves. The euro zone May unemployment rate, consensus at 6.3%, is also due Thursday and could move EUR/USD on the margins if it surprises in either direction.

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