Asian stocks fell on a chip rout; Japan and South Korea saw sidecars. BOK hiked 25bp to 2.75%. USD/KRW slipped to 2-month lows. Iran signal faded.
Asian equities tumbled Thursday. Japan's Nikkei and South Korea's Kospi both opened sharply weaker, with memory and equipment makers leading the declines. Kioxia and SoftBank Group led Tokyo's rout. SK Hynix and Samsung Electronics dragged the Kospi low enough to trigger a sell-side sidecar. The selling later spread to the KOSDAQ, which triggered its own sidecar. South Korea's Financial Services Commission chief said new measures on single-stock leveraged ETFs would be announced soon, a signal tied directly to the scrutiny of those products' role in the day's swings.
The Bank of Korea raised its base rate by 25 basis points to 2.75%, its first hike since early 2023. The decision was backed by all but one of 37 economists polled by Reuters. The central bank aimed to shore up the depreciating won and contain stubborn inflation expectations. The hike was fully priced in. The won still slipped to a two-month low, a move that outpaced what the rate decision alone would typically drive, some traders said. The won's decline was the first time it had fallen to that level in two months, according to market data. The BOK has been under pressure to act as the dollar strengthens and import costs rise.
A rare diplomatic signal did little to shift risk appetite. President Trump announced that Iran has released an American citizen who had been wrongfully detained since December 2024. Trump said the individual, whom he did not name, is now safely outside of Iran and in good condition. The gesture briefly prompted questions about a thaw between Washington and Tehran. Both sides continued exchanging strikes through the day, and oil held supported near recent highs.
St. Louis Fed President Alberto Musalem appeared at an event and offered no comment on the economy or monetary policy. His most recent public remarks on inflation have been hawkish.
Advantest (ATEYY), which holds an AlphaScala AlphaScore of 72, was among the hardest hit in Tokyo. The stock fell alongside other chip names, reflecting the broader sector weakness.
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