Asian equities fell sharply on Friday, mirroring Wall Street’s abrupt intraday collapse and wiping out the previous day’s gains. The broad regional sell-off reflected renewed volatility driven by fragile sentiment in global technology stocks, shifting expectations for U.S. monetary policy, and lingering geopolitical pressures across Asia. The synchronized decline underscores how dependent global markets have become on the momentum of U.S. mega-cap technology names—and how quickly sentiment can deteriorate when their rally stumbles.

Japan’s Market Hit Hard as AI Valuation Fears Resurface

Japan’s Nikkei 225 dropped 2.4% to 48,645.95, marking one of its steepest declines in months as concerns mounted that artificial intelligence–linked valuations may have reached unsustainable levels. Stronger-than-expected U.S. jobs data added a second layer of pressure by reducing the likelihood of a Federal Reserve rate cut in December, dampening risk appetite across equities.

Domestic forces also weighed on Japanese assets. Investors are awaiting Prime Minister Sanae Takaichi’s stimulus package, with expectations of increased government spending pressuring both the yen and Japanese government bonds. At the same time, data showed inflation rising to 3.0% in October from 2.9%, reinforcing the challenge facing policymakers. Export data was mixed: Japan’s outbound shipments rose overall in October, but exports to the United States fell, a direct response to new tariffs introduced by the Trump administration.

South Korea and China Face Steeper Losses

South Korea’s KOSPI tumbled 3.9%, reversing all of Thursday’s gains. Market heavyweights Samsung Electronics and SK Hynix were hit particularly hard, sliding 5.8% and 8.6%, respectively, underlining the sensitivity of the region’s semiconductor sector to global shifts in sentiment toward AI-related stocks.

Chinese markets also saw significant weakness. Hong Kong’s Hang Seng index dropped 2.3%, while the Shanghai Composite declined 1.8%. Investors remained cautious amid escalating diplomatic friction between China and Japan over Taiwan, adding another layer of uncertainty to an already tense geopolitical environment.

Australia’s S&P/ASX 200 fell 1.5%, and Taiwan’s Taiex lost nearly 3.2%, reflecting a broad retreat across Asia-Pacific trading floors.

Wall Street’s Collapse Reverberates Across Markets

The regional decline echoes Thursday’s extraordinary session in the United States, where major indices reversed strong early gains following heightened volatility and concerns about overheated technology valuations. The S&P 500 ended down 1.6%, the Nasdaq plunged 2.2%, and the Dow declined 0.8%. The most aggressive selling hit Nvidia, cryptocurrencies, and other high-momentum assets that investors previously chased to avoid missing out on further upside.

Bitcoin’s drop below $87,000 from nearly $125,000 a month earlier illustrates how rapidly risk appetite has deteriorated. A broader $1.2 trillion loss in crypto market value over six weeks reinforces the depth of the correction across speculative assets.

Energy and Currency Markets Show Defensive Moves

Oil prices extended losses Friday, with U.S. benchmark crude sliding to $58.23 per barrel and Brent falling to $62.70. Meanwhile, the U.S. dollar softened slightly against the yen, while the euro gained modest ground, reflecting a cautious but orderly shift into safer assets.