GLOBAL MARKETS: Asian shares fall as chipmakers drag; US jobs data looms

Asian equities fell on Thursday as investors continued to take profits from semiconductor stocks following a strong quarter, while currency and bond markets positioned for upcoming U.S. labor data that could shape expectations for interest rate moves.

Oil prices also weakened, with Brent crude slipping 0.8% to about $71 per barrel, hitting a four-month low. Sentiment was pressured after U.S. President Donald Trump said talks with Iran had progressed positively in Qatar, while increased tanker traffic through the Strait of Hormuz added to expectations of steady supply.

Across Asia, markets were broadly lower. The MSCI index of Asia-Pacific shares excluding Japan dropped 0.8%, while Japan’s Nikkei fell 1.1%, extending losses from the start of the quarter.

South Korea’s KOSPI led regional declines, sinking 2.7% and adding to a 2% drop in the previous session. The index had surged 68% in the second quarter, fueled by strong demand for artificial intelligence-related memory chips.

Heavyweight semiconductor stocks led the pullback. SK Hynix plunged 7.7%, while Samsung Electronics fell 6.2%. Sentiment was also affected by reports that Meta Platforms is developing a cloud business to sell excess AI computing capacity, boosting its shares in U.S. trading but weighing on Asian chip suppliers.

Hong Kong’s Hang Seng Index bucked the regional trend, rising 1.8%.

Foreign investors have sold Asian equities at the fastest pace in at least 16 years in the first half of 2026, as the powerful AI-driven rally prompted profit-taking in South Korea and Taiwan while shifting capital toward undervalued markets.

Attention now turns to the upcoming U.S. non-farm payrolls report, which is due Thursday ahead of the Independence Day holiday on Friday. Economists surveyed expect the U.S. economy to add about 110,000 jobs in June, with forecasts ranging widely from 25,000 to 200,000, signaling heightened uncertainty. The unemployment rate is expected to remain steady at 4.3%.

For equity investors, the report is seen as a key catalyst for near-term direction.

“There is probably no single rigid playbook to work from. Ideally, equity players want a Goldilocks outcome: respectable job creation with a stable unemployment rate,” said Chris Weston, head of research at Pepperstone. “Anything that avoids a marked increase in the implied probability of near-term rate hikes is likely to be welcomed by equity bulls.”

At the Sintra Forum, Federal Reserve Chair Kevin Warsh said inflation risks have eased recently, offering only temporary relief to bond markets. However, he reaffirmed the central bank’s commitment to its 2% inflation target and warned against expectations of looser monetary policy. Markets are currently pricing in roughly an 80% probability of a rate hike in September.

U.S. Treasury yields continued to climb as investors braced for a potentially strong jobs report that could reinforce expectations of tighter policy.

The 2-year Treasury yield rose 1 basis point to 4.1785%, up 9 basis points for the week, while the 10-year yield held steady at 4.4811% after gaining 10 basis points over the same period.

Stronger yields kept the U.S. dollar supported against major currencies.

The euro slipped 0.4% overnight to $1.1379 after European Central Bank President Christine Lagarde said inflation and growth risks in the eurozone are now more balanced. The currency was little changed in Asian trading on Thursday.

The Japanese yen was also steady at 162.59 per dollar, hovering near a 40-year low after touching 162.84 in the previous session. The currency’s weakness has raised renewed warnings from Tokyo about possible intervention, although past efforts involving trillions of yen have had only temporary effects.

Gold prices rebounded 0.5% to $4,050 per ounce, recovering slightly after a sharp decline in the previous quarter. -Reporting by Stella Qiu; Editing by Kevin Buckland/Reuters