Asian markets retreat after tech losses hobble Wall St

HONG KONG, China — Asian markets mostly fell Friday following a broadly negative lead from Wall Street, where tech giants led a sell-off on profit-taking, while traders are on intervention watch as the yen retreats back toward a three-decade low.

A batch of worse-than-forecast US data provided further signs that the world’s number one economy was softening but that was not enough to help push the S&P 500 and Nasdaq to more record highs.

The readings showed more people claiming unemployment benefits than estimated, housing starts falling and a key gauge of business confidence for June well down from May.

READ: Nvidia suffers rare retreat as Nasdaq streak ends

Meanwhile, Minneapolis Fed boss Neel Kashkari said it could take a year or two to bring inflation back down to the central bank’s 2 percent target, echoing his colleagues’ warnings that they wanted to take their time before cutting borrowing costs.

The economic figures boosted interest rate cut hopes but were overshadowed by losses in market titans including Nvidia, Apple, and Microsoft who have spearheaded the recent tech-fueled rally in US markets.

Microsoft back to No. 1

The 3.5 percent drop in Nvidia meant it relinquished its crown as the world’s most valuable publicly traded firm to Microsoft, which it had overtaken earlier this week.

Asian traders tracked the weak lead, with Hong Kong, Shanghai, Seoul, Wellington, Taipei, and Manila all down. Singapore, Sydney, and Jakarta edged up while Tokyo was flat.

Attention is once again being given to the yen as it edges back towards the 34-year low against the dollar, which led to a suspected intervention by Japanese authorities in April.

Fading hopes that the Fed will cut interest rates more than once this year — if at all — have pushed the dollar up against its peers in recent weeks, with the yen taking a hit owing to the Bank of Japan’s refusal to tighten monetary policy quicker.

While BoJ is expected to announce further normalization measures at its next meeting, the big difference in yields between the two central banks means investors are sticking with US assets for now.

Giving up on the yen?

The yen barely moved Friday, a day after weakening to around 159 per dollar from 157.80.

READ: Yen drops and Nikkei rises as BoJ delays tightening; markets mixed

That led top currency official Masato Kanda to repeat that the government was ready to act when appropriate and movements were too quick — he said earlier in the year that a 10-yen move in either direction was considered too much.

Authorities are suspected to have intervened when the Japanese unit fell past 160 to the dollar two months ago.

However, analysts have said interventions had little long-term impact.

And Monex’s Helen Given added: “I’m more and more convinced that currency officials are giving up on the yen.

“The yield differential is just too much to overcome right now, and with the US now only eyeing one cut this year it’s not going to materially improve anytime soon.”