Stock markets across Asia tumbled on Monday morning, mirroring a significant global selloff last week. The Nikkei 225 in Japan saw a sharp decline of 4.6%, while the Topix index fell even more steeply by 5.7%. This slump follows a dismal report on US employment, which revealed that only 114,000 jobs were added in July, far below expectations. This weak data has reignited fears of a potential recession in the world’s largest economy.
Adding to the market unease is the recent appreciation of the yen. The Japanese currency has strengthened approximately 9% against the US dollar over the past month, largely in response to the Bank of Japan’s decision to raise interest rates last week. This stronger yen has made Japanese exports more expensive and less appealing to international buyers. Kei Okamura, a Tokyo-based portfolio manager at Neuberger Berman, noted, “The selloff was instigated by the sharp appreciation of the yen as global investors turned cautious on Japanese corporate earnings, especially that of exporters such as automakers.”
Elsewhere in Asia, Taiwan’s main share index plummeted 6.9%, with semiconductor giant TSMC seeing a decline of more than 6%. In South Korea, the Kospi index fell 5.5%, with major chipmakers Samsung and SK Hynix dropping 7% and 6.5%, respectively. The downturn in the tech sector reflects broader concerns about high borrowing costs and the potential end of a long-running rally in tech stocks, fueled by optimism over artificial intelligence (AI).
Meanwhile, the Hang Seng Index in Hong Kong fell modestly by 0.6%, and the Shanghai Stock Exchange saw a slight dip of 0.2%. These relatively smaller declines suggest that investor sentiment in China may be less affected by the recent global market turbulence.
Cryptocurrencies also experienced a downturn, with Bitcoin falling to just over $53,000, its lowest level since February. The decline in digital assets adds to the overall sense of volatility in the financial markets.
In the US, Friday’s sharp stock market declines highlighted growing concerns about the sustainability of the jobs boom. The Nasdaq Composite, which had been buoyed by AI enthusiasm, corrected by about 10% from its recent peak within a few weeks. The Dow Jones Industrial Average and the S&P 500 also fell by 1.5% and 1.8%, respectively, reflecting widespread market anxiety.
As global investors navigate these uncertainties, attention is shifting to the Federal Reserve’s next moves regarding interest rates, with speculation mounting about potential cuts in response to the slowing job growth.
I am Aparna Sahu
Investment Specialist and Financial Writer
With 2 years of experience in the financial sector, Aparna brings a wealth of knowledge and insight to Investor Welcome. As an accomplished author and investment specialist, Aparna has a passion for demystifying complex financial concepts and empowering investors with actionable strategies. She has been featured in relevant publications, if any, and is dedicated to providing clear, evidence-based analysis that helps clients make informed investment decisions. Aparna Sahu holds a relevant degree or certification and is committed to staying ahead of market trends to deliver the most up-to-date advice.
