Asian Semiconductors Plunge Amid Renewed Skepticism Over AI Investments
The Tokyo yen traded in a narrow range around 163 against the dollar on Tuesday, as caution prevailed ahead of policy decisions from the Federal Reserve and Bank of Japan.
Cautious investors adopted a risk-averse stance due to wariness over potential currency intervention by the Japanese government and the Bank of Japan, providing underlying support for yen buying.
In stark contrast, Asian equity markets were roiled by a ferocious sell-off in semiconductor stocks, with South Korea's SK Hynix plummeting more than 15%, Samsung Electronics dropping over 8%, and the KOSPI triggering circuit breakers.
The rout was fueled by a confluence of factors, including renewed skepticism over the profitability of massive AI investments, reports that China has begun mass production of domestically developed DUV lithography equipment, and ongoing deleveraging in the South Korean market.