Asian stocks retreat as oil, bond yields revive inflation concerns
Asian stocks mostly fell on Tuesday as higher oil prices and a renewed rise in bond yields outweighed fresh optimism around artificial intelligence spending. The pullback came after several sessions of gains, with technology shares coming under renewed pressure across Japan, South Korea and parts of China and Hong Kong.
The MSCI AC Asia Pacific gauge fell about 0.6%, while Nasdaq 100 Futures dropped 0.8% and S&P 500 Futures slipped 0.4%.
The main shift came from markets reassessing the inflation and rate outlook. Brent crude rose around 0.4% to $91.24 a barrel, while the U.S. 30-year Treasury yield climbed to 5.3%, its highest level since June 2007.
Japanese 10-year government bond yields also extended gains after reaching their highest level since 1996, reflecting stronger expectations for further Bank of Japan tightening and concerns over Japan’s fiscal position.
Japan, Korea tech stocks retreat as yields climb
Japan’s Nikkei 225 dropped 1.9%, while the broader TOPIX fell 0.5%. South Korea’s KOSPI erased an early gain of more than 3% and slid 1.1% after returning from Monday’s holiday.
Japanese technology shares bore the brunt of the pullback. Kioxia Holdings plunged 8.3%, Murata Manufacturing dropped 9.6% and TDK lost 3.7%. Sony slipped 1.2%.
South Korea’s chip stocks also weakened with Samsung Electronics falling 1.4%, while LG Innotek declined 1.3%. SK Hynix, however, bucked the sector weakness and gained 1.4%.
The reversal came despite another major commitment to AI infrastructure. Nvidia has agreed to support up to $105 billion of financing for a new OpenAI data-center campus in Ohio, underscoring the scale of spending behind the AI buildout.
DBS analysts said the broader equity-risk backdrop remains benign, supported by strong corporate earnings, the AI boom and a less hawkish Federal Reserve.
They warned, however, that the risk profile could deteriorate if the AI rally falters, geopolitical tensions escalate or the Fed resumes raising rates.
