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Japanese bonds and the yen rallied Friday and Asian stock markets lost ground as an overnight tech rout on Wall Street fueled a broader global flight to safer assets.
Japanese and Korean stock markets, which have both been strongly supported this year by exposure to the AI investment boom, fell as global concerns about the sector intensified.
Japan’s tech-heavy Nikkei 225 index fell 2 percent, bringing this week’s decline to nearly 4 percent.
The moves came after the tech-heavy Nasdaq 100 index fell 2.9 percent on Thursday in the United States, while the blue-chip S&P 500 index fell 1.2 percent.
Brent crude continued to advance, rising 0.6 percent to $113.65 a barrel, as oil headed for a third consecutive weekly rise.
The rotation toward safer assets and liquid bond markets, including U.S. Treasuries, triggered what Tokyo traders called a sudden wave of “crazy” buying of Japanese bonds.
The yield on Japan’s benchmark 10-year government bond fell 0.09 percentage points to 2.77 percent on heavy buying, extending its rise for a fifth day. Yields move inversely to prices.
The Japanese currency gained as much as 0.3 percent in morning trading, putting it at a one-month high of ¥156.3 against the dollar. Earlier this week, the yen was trading at levels low enough for traders to be wary of possible intervention by Japanese authorities.
“Global investors are testing the risk of hyperscalers and the AI story collapsing and looking for places to park their cash safely,” said a Tokyo-based currency trader.
South Korea’s Kospi fell 4 percent and headed for a fourth consecutive weekly loss. The index is down a fifth this month and is more than 40% off its June record, making it the world’s worst-performing stock market in the most recent quarter due to its heavy exposure to AI deals.
The Kospi’s decline has been led by memory chipmakers, with Meta’s spending plans reigniting doubts about the long-term viability of debt-financed AI infrastructure expansion.
Samsung Electronics fell 4.1 percent, while SK Hynix fell 2.6 percent. The two chipmakers account for about half of the South Korean index.
SK Hynix said Friday it would delist the U.S. listing of Solidigm, its California-based maker of Nand flash memory chips used to store data in electronic devices, blaming “recent capital market conditions and stock price trends.”
In Japan, shares of OpenAI investor SoftBank fell 6 percent, bringing this week’s decline to almost 15 percent. Sumco, which produces wafers used in high-end semiconductors, led the Nikkei sell-off with a decline of 7.8 percent.
The Nasdaq 100 was expected to open up about 0.2 percent. The S&P 500 was poised to open flat on Friday.
Shoki Omori, a fixed income strategist at Deutsche Bank, said concerns about the scale of hyperscalers’ capital spending and the debt raised to finance them had pushed investors toward safer assets such as U.S. Treasuries.
He said the strengthening yen eased pressure on the Bank of Japan to step up its rate hikes.
However, Omori cautioned that the recent move into Japanese government bonds did not yet represent a repatriation of Japanese assets.
China’s CSI 300 composite index fell about 1 percent and remains in a bear market after falling 20 percent from its peak in late June.
Taiwan’s stock market, the fifth largest in the world, was closed on Friday after a typhoon alert.
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