Asian stock markets were unsettled on Wednesday following a global selloff in technology and semiconductor shares, with analysts warning that sharp market swings could continue as investors reassess growth expectations and monetary policy risks.
MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.02 percent, reflecting cautious trading after technology stocks led a wider market decline.
South Korean shares rebounded 2.2 percent after suffering their worst one-day fall since March on Tuesday, when the market plunged 10 percent amid heavy selling pressure in technology and semiconductor companies.
Japan’s Nikkei index fluctuated between gains and losses during trading, last down 0.8 percent as investors remained cautious over global market conditions.
Michael McCarthy, market analyst at Moomoo Securities Australia, said recent market movements pointed to growing instability.
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“Price action in markets over the last seven trading days has been alarming, not just when it falls, but also when it rises,” he said, adding that rapid moves in either direction were a sign of uncertainty.
The weakness in Asian markets followed losses on Wall Street, where investors reacted to concerns over rising spending linked to artificial intelligence development and speculation that the U.S. Federal Reserve could maintain a more aggressive monetary policy stance.
U.S. stocks declined overnight, with the Dow Jones Industrial Average falling 0.09 percent, the S&P 500 dropping 1.4 percent and the Nasdaq Composite losing 2.2 percent.
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Technology shares came under pressure as investors questioned whether the massive investment required for artificial intelligence infrastructure would generate sufficient returns.
At the same time, U.S. Treasury yields declined as investors moved towards safer assets. The benchmark 10-year Treasury yield fell 1.41 basis points to 4.493 percent.
Oil prices extended their recent declines, trading close to four-month lows reached in the previous session.
The drop came after signs that some oil tankers stranded in the Gulf since the start of the Iran conflict could resume movement through the Strait of Hormuz.
However, uncertainty remained over the durability of a reported U.S.-Iran agreement, with both countries offering different accounts of key elements, including nuclear inspections and control of the strategic waterway.
Currency markets also remained under pressure, particularly the Japanese yen, which hovered near a four-decade low against the dollar.
The yen traded around 161.57 per dollar, keeping investors alert for possible intervention by Japanese authorities to support the weakening currency.
A summary of opinions from the Bank of Japan’s recent policy meeting showed that some board members supported further interest rate increases after the central bank raised its policy rate to 1.00 percent, the highest level in 31 years.
The dollar index, which measures the U.S. currency against a basket of major currencies, edged up 0.02 percent to 101.43, remaining close to a one-year high.
The euro weakened 0.06 percent to $1.1375, while the British pound slipped 0.08 percent to US$1.3192.
Gold prices continued to decline, falling 0.48 percent to US$4,088.71 an ounce as expectations of higher interest rates reduced demand for non-yielding assets.
In cryptocurrency markets, bitcoin gained 0.84 percent to US$62,914.94, while ethereum rose 0.43 percent to US$1,669.35.
Investors are now watching developments in global technology markets, central bank policy signals and geopolitical events for direction as concerns over market stability remain elevated.
