- KOSPI crashed 5.98% and TAIEX fell 3.76% yesterday — overnight US tech rebound led by Microsoft earnings (+5.5% XLK) sets up a potential relief bounce across Asian semiconductor names today
- Yen surged 2.24% against the dollar, pressuring Japanese exporters and dragging the Nikkei down 1.49% — further yen strength today would keep Tokyo on the back foot
- Gold and copper both jumped over 3% overnight while VIX collapsed to 17.1, signaling a broad risk-on shift that should support ASX miners and Hong Kong at the open
Where Asia Closed Yesterday
The story across Asia yesterday was a clean split between the chip-heavy Northeast Asian markets and everything else.
South Korea’s KOSPI was the standout casualty, plunging 5.98% to 5,663.24 in the worst single-session drop in months. Taiwan’s TAIEX followed with a 3.76% decline to 40,039.18. Both markets are heavily weighted toward semiconductors and AI hardware — and both took the full force of a global chip selloff that preceded Microsoft’s after-hours earnings report.
Japan’s Nikkei 225 fell 1.49% to 61,434.19, pressured by a sharply stronger yen (USD/JPY dropped 2.24% overnight). A rising yen compresses earnings estimates for Toyota, Sony, and the broader export complex — and yesterday’s move was large enough to keep that pressure front of mind today.
China and Hong Kong went the other direction entirely. The Hang Seng rallied 1.96% to 25,807.92, Shanghai Composite added 0.40% to 3,828.47, and the Shenzhen Component climbed 1.10% to 13,658.44. Domestic policy support and a rotation out of global tech into value and consumption names drove the bid.
Australia’s ASX 200 gained 1.01% to 9,038.60, lifted by banks and miners. Singapore’s Straits Times Index rose 1.73%, India’s Nifty 50 added 1.10% to 24,250.20, and New Zealand’s NZX 50 dipped 0.66%.
US Overnight Snapshot
Wall Street reversed hard overnight. The S&P 500 gained 1.66% to 7,440, and the Nasdaq Composite surged 2.78% to 25,100. The tech-heavy QQQ ETF jumped 3.30%.
The catalyst was Microsoft’s earnings, which sent its stock to a historic single-day gain and lit up the entire semiconductor supply chain. The Technology sector ETF (XLK) soared 5.50% — the best overnight performance for the sector in months. Micron, SanDisk, and other chip names caught major upgrades in the aftermath. The VIX collapsed 17.28% to 17.1, a level that signals the fear spike from earlier in the week has been fully unwound.
For Asia, this matters immediately. The KOSPI and TAIEX selloffs yesterday were driven by the same chip anxiety that has now reversed in New York. Samsung, SK Hynix, and TSMC ADRs would have tracked the overnight move — expect opening gaps higher in Seoul and Taipei.
Commodity + FX Watch
Gold surged 3.33% to $4,170 — one of the largest single-session moves this year. The Fed’s July rate decision appears to have reignited expectations for easing, pushing real yields lower and lifting the entire precious metals complex. ASX gold miners (Newmont, Northern Star, Evolution) should open strong.
Copper jumped 3.63% to $6.50, reinforcing the risk-on tone and providing a tailwind for ASX base metal names and China-linked industrial plays.
WTI oil slipped 0.53% to $84 — a mild move that keeps energy names neutral across the region.
The big FX move is USD/JPY, down 2.24% to 160. That’s a sharp yen rally that will keep pressure on Nikkei exporters. AUD/USD was flat at 0.696, meaning the commodity tailwinds flow through to ASX earnings without a currency headwind.
What to Watch Today
- KOSPI and TAIEX gap-up potential: Yesterday’s 5.98% and 3.76% drops preceded the US tech reversal. Samsung, SK Hynix, and TSMC will price in the overnight Micron and Microsoft moves at the open — watch whether the bounce holds past the first 30 minutes or sellers reload.
- Fed decision fallout: Markets reacted overnight to the Fed’s July rate call. Any follow-through commentary from Fed officials today will set the tone for rate-sensitive sectors across Asia, particularly REITs and banks.
- Yen direction: USD/JPY at 160 after a 2.24% drop puts Bank of Japan intervention chatter back on the table. If the yen continues strengthening, Nikkei underperformance extends. If it stabilizes, Japanese exporters get relief.
- Hong Kong tech continuation: The Hang Seng gained nearly 2% yesterday without the benefit of the Microsoft earnings catalyst. If overnight US tech strength bleeds into HKEX-listed names like Tencent, Alibaba, and Meituan, Hong Kong could extend its lead today.
Bottom Line
The overnight setup is clearly risk-on for Asia. A 3.30% QQQ bounce, VIX back below 18, and strong commodity prices all favor a relief rally — especially in the Korean and Taiwanese chip names that got hammered yesterday. The main risk is the yen: a 2.24% move in USD/JPY is not noise, and if that trend extends, Tokyo stays heavy even as the rest of the region catches a bid. Luna3 sees this as a session where yesterday’s losers (Seoul, Taipei) have the most upside if the US tech tone holds, while China and Hong Kong continue trading their own macro story.
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