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Asian Currencies Stay Rangebound as Middle East Tensions, Weak China GDP Weigh on Sentiment 
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ECB's Kocher Says No Inflation Spillover Yet From Iran Conflict, Warns Risks Remain 
Dollar Slides as Softer US Inflation Dims Fed Rate Hike Expectations 
Gold Prices Slip as Oil Rally Fuels Inflation Fears, Strengthens Dollar 
China Q2 2026 GDP Misses Forecast as Weak Domestic Demand Offsets Export Strength 
China Home Prices Fall Again in June Despite Slower Pace of Decline 
South Korea’s KOSPI Enters Bear Market Despite Remaining 2026’s Best-Performing Major Stock Index 
Port of Los Angeles Posts Record June Cargo Volume as Importers Rush Ahead of U.S. Tariffs 
Japan’s Nikkei 225 tumbled more than 5% on Friday, falling to its lowest level since June 11 as a global selloff in artificial intelligence (AI) and semiconductor stocks intensified. The decline mirrored heavy overnight losses on Wall Street, where investors continued to reduce exposure to high-flying AI-related companies amid valuation concerns and rising geopolitical risks.
Technology stocks led the losses in Japan. Memory chipmaker Kioxia Holdings plunged more than 16%, marking one of its sharpest declines in months, while Murata Manufacturing dropped nearly 12% and TDK fell over 6%. Sony was a rare bright spot, gaining about 1.6% despite the broader market weakness.
The downturn spread across Greater China as investors sold AI and semiconductor shares. China’s CSI 1000 index fell more than 3% to its lowest level since late March, pressured by losses in small- and mid-cap technology companies. AI chip designer Cambricon Technologies declined over 6%, while Foxconn Industrial Internet lost more than 5%. Other semiconductor-related firms, including SMIC, NAURA Technology and Luxshare Precision, also moved lower.
Hong Kong’s Hang Seng Index dropped more than 2%, weighed down by major technology companies. Meituan and Kuaishou each slid around 6%, while Tencent, Alibaba, Baidu and Xiaomi posted losses ranging from 2% to 4%.
The regional weakness followed a sharp correction in U.S. technology stocks. AI-linked storage and chip companies, including Sandisk, Western Digital and Seagate, each lost more than 9%, while Intel and Micron Technology declined roughly 6%. IBM also recorded one of its largest single-day drops after warning that customers were shifting spending toward AI infrastructure, while recently listed SpaceX extended its retreat from post-IPO highs.
Analysts said the latest selloff reflects a broader unwinding of momentum trades rather than deteriorating company fundamentals. Investors remain cautious over elevated AI valuations, uncertain returns from massive data center investments and growing competition from Chinese AI developers. Meanwhile, renewed tensions in the Middle East have added to market uncertainty.
Bank of America maintained that China remains a significant long-term AI competitor due to its rapid adoption, lower data costs and expanding domestic AI ecosystem, though sustained investment and successful commercialization will be key to realizing its long-term growth potential.
