Asian Stocks Plunge as Tech Sector Crashes; Safe-Haven Currencies Surge

URGENT UPDATE: Asian equities are experiencing a severe downturn this morning, with significant losses driven by a deepening tech sector rout. Following a sharp decline on Wall Street, local stocks are plummeting, prompting a flight to safe-haven currencies like the Japanese Yen (JPY) and Swiss Franc (CHF).

In Japan, the Nikkei 225 has fallen below the critical 50,000 level, marking its steepest drop in over six months. SoftBank Group led the rout, plummeting as much as 14%, its worst fall since August 2024. The Topix index also tumbled, reflecting heavy sell-offs across technology-related shares.

Meanwhile, South Korea’s Kospi index has dropped as much as 4.8%, driven down by declines in major players like Samsung Electronics and SK Hynix. This two-day decline now totals 7%, the sharpest dip since August 2024, as the Kospi breaks below the critical 4,000 mark. The South Korean won weakened by 0.6%, hitting its lowest point since April as foreign investors dump local shares, triggering a brief trading halt.

This risk-off sentiment has sent investors flocking to safe-haven currencies, with the JPY and CHF gaining early in the session. However, losses were slightly mitigated by a surprising announcement from Beijing. China revealed it would suspend 24% of U.S. tariffs while maintaining 10% tariffs for one year. Starting November 10, additional duties on certain U.S. imports will also cease, offering a glimmer of hope amid the turmoil.

In North America, attention turns to Canada’s fiscal update, which shows a widening deficit outlook of $78.3 billion for 2025/26, nearly double prior estimates. This has led to downward pressure on the Canadian dollar (CAD), even as borrowing costs ease.

Oil markets reacted to private-sector inventory data revealing a substantial 6.5 million-barrel build in crude oil, far exceeding expectations. Additionally, gasoline and distillate draws were larger than anticipated, signaling further market instability.

In New Zealand, labor data confirmed a rise in the jobless rate to 5.3% for Q3, with flat employment figures and a decline in the participation rate to 70.3%. This economic softening has put pressure on the New Zealand dollar (NZD), pushing the AUD/NZD pair to a twelve-year high.

The Bank of Japan’s September meeting minutes reinforce its cautious stance on economic normalization. Policymakers noted that real rates remain low but acknowledged growing uncertainty regarding U.S. tariffs and global trade.

The S&P Global services PMI in China also slipped to 52.6 in October, marking a three-month low. Export orders contracted, and employment figures declined, adding to the pressure felt by smaller exporters.

As the market landscape shifts dramatically, investors are advised to stay vigilant. The impacts of these developments will continue to unfold, with potential ripple effects across global financial systems. Stay tuned for updates as the situation evolves.