Asian Shares Slip as Tech Sell-off Boosts Bonds and Dents Rate Hike Bets

Asian shares fell on Friday, led by declines in regional indices as concerns over artificial intelligence funding needs triggered a tech sell-off and drove investors toward safe-haven assets.

MSCI's broadest index of Asia-Pacific shares excluding Japan dropped 0.3% on Friday, extending its weekly loss to 2.7% and marking a fourth consecutive week of declines. Japan's Nikkei fell 1.3%, bringing its weekly loss to 5%. South Korea's KOSPI declined 1.7%, while mainland Chinese blue chips lost 1.1% to reach their lowest level since July 2025. Taiwan's stock market was closed due to a typhoon, and Hong Kong's Hang Seng edged up 0.1% following a 3% drop on the previous day.

Market Reactions and Factors

• Tech Sector Pressure: Wall Street faced a slump as Meta shares fell nearly 8% after reporting a cash outflow due to AI expenditures and announcing plans for a stock split. Tesla shares dropped 3.1% following a cut to its 2026 capital spending plans.
• Treasury Rally: Fears surrounding AI infrastructure costs prompted a flight to safety, leading to the largest daily rally in US Treasuries in over three years. The benchmark 10-year Treasury yield fell below the 5% level to 4.9591%.
• Interest Rate Expectations: Markets pared back expectations for Federal Reserve policy tightening, with the implied probability of a December rate rise falling to 85% and rate hike expectations for the following year being reduced.
• Commodities and Currencies: Brent crude reached a five-month peak at $114 a barrel amid Middle East supply disruption concerns. Safe-haven currencies such as the Japanese yen and Swiss franc gained against the dollar, while gold remained flat at $4,021.99 an ounce.

Practical Implications and Verification

Investors and analysts monitoring these market shifts can verify original financial data, bond yields, and central bank probabilities through official financial exchanges, central bank publications, and regulated market data providers. Readers should consult certified financial advisors before making investment decisions based on volatile market movements.