GLOBAL MARKETS: Asia shares retreat after downside of high chip demand starts to show

SYDNEY - Asian shares pulled back on Friday after a stellar quarter, as Apple's hefty price hikes revealed the downside of booming chip demand, while the threat of Japanese intervention kept the yen from hitting 40-year lows.

Oil prices fell toward their lowest in fourth months, with Brent crude futures LCOc1 down 1.5% to $74.1 a barrel, as Saudi Aramco resumed oil loading at its Ras Tanura terminal after a halt of almost four months. More stranded oil tankers have crossed the Strait of Hormuz with the help of military escorts, although a cargo ship was hit by a projectile.

Nasdaq futures NQc1 tumbled 1.3% in Asia, as investor sentiment soured after a media report that OpenAI is considering holding off on its public debut until next year. European bourses were bracing for a lower open, with pan-region stock futures STXEc1 off 0.8%.

Shares of Apple AAPL.O slid 6.1% overnight after the tech giant announced steep price increases for iPads and MacBooks to counter the surging cost of memory and storage chips. That wiped about $250 billion off of its market value. Microsoft MSFT.O is raising prices for its Xbox gaming consoles by up to $150 worldwide.

The price increases tempered investor enthusiasm about a blowout earnings report from chipmaker Micron MU.O this week, whose shares surged almost 16% overnight to a record high.

Apple's price increases were a reflection of how "big tech may at some point start to feel the pain of these higher component costs, and that can become a broader ecosystem headwind," said Charu Chanana, chief investment strategist at Saxo.

"That is why markets are becoming more cautious. Higher input costs, heavier capex needs and rising funding demands are making investors more selective about AI exposure."

Analysts also said month-end and quarter-end rebalancing flows might have contributed to the weakness and choppy prices in big tech companies, which have outperformed for much of the second quarter.

On Friday, MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 3%, bringing its weekly loss to 4.4%, as investors took profits from a 23% quarterly gain, the best since 2009. It was down 2.8% for the month.

Japan's Nikkei .N225 slumped 4.2% and was headed for a weekly drop of 2.7%%. It has climbed 4.5% for the month and surged 35% for the quarter, the biggest quarterly gain in its history.

South Korea's KOSPI .KS11 was last down 5.8%, after slumping as far as 8% earlier to triggering a circuit breaker. It was down 7% for the week, but still managed a monstrous 66% gain for the quarter, the best since 1998.

Hong Kong's Hang Seng index .HSI fell 1.7%, but it was down 8.5% for the quarter, marking the third straight quarter of declines to be an outlier in the region.

YEN WEAK

In the currency markets, the yen JPY=EBS teetered near its weakest level against the dollar in 40 years at 161.60, well beyond the 160 level that many see as a line in the sand for Japanese authorities.

It found little relief even as a U.S. inflation reading met forecasts and traders trimmed bets for a rate hike from the Federal Reserve in September.

Separate data also showed the U.S. economy grew faster than previously estimated in the first quarter thanks to a downward revision to imports, but consumer spending almost stalled, casting doubt on growth momentum in the second quarter.

The dollar index =USD, which measures the greenback's strength against a basket of six major peers, slipped 0.1% to 101.36, but remained not far from its strongest level since May 2025. It has risen 0.6% this week.

Treasury yields slipped on Friday. 2-year yields US2YT=RR fell 2 basis points at 4.0942% to mark a fourth day of declines, while ten-year yields US10YT=RR eased 1 bps at 4.3804%, having hit a nearly two-month low of 4.3627% in the previous session.

Precious metals have had a rough month, with spot gold XAU= down 11.5% to $4,011 an ounce and spot silver XAG= sliding 24.5% to $56.7 an ounce.

-Reporting by Stella Qiu and Ankur Banerjee; Editing by Kevin Buckland and David Dolan/Reuters