The Japan Times - Asian markets mixed as tech firms claw back some losses

Tech firms took a hammering on Tuesday amid concerns about China's progress in developing AI chips and following comments by Broadcom's boss likening the AI buying frenzy to gambling.

The ructions felt in Seoul, Tokyo and Taipei -- which have big tech weightings -- saw giants SK hynix, Advantest and TSMC suffer huge losses, pushing them back towards levels last seen following their summer rout.

All three markets bounced Wednesday as the same firms provided much-needed support, with Seoul and Taipei both up more than one percent.

There were also advances in Shanghai and Singapore, but Hong Kong, Sydney, Wellington and Manila dropped.

The gains were helped by hopes that the US Federal Reserve could avoid hiking rates further next year, after the bank's New York boss suggested the policy board could hold off after lifting once more this year.

"I haven't changed my view that it may be appropriate to have one more rate hike," John Williams told Bloomberg News in an interview.

"I don't think at this time I have any reason to believe that we would need to do more" after that.

He said there were signs inflation will come down towards the Fed's two percent goal next year as the impacts from tariffs and an energy price shock fade.

All eyes are on the release of consumer price data due later Wednesday, which could play a key role in whether the bank decides to hike for a second successive meeting on October 28.

"After another disappointing (non-farm payrolls) report, the third in the last four months, the Fed is stuck between a rock and a hard place," said Matt Weller at FOREX.com.

"The labour market is showing signs of deteriorating, while price pressures have remained above the central bank’s target for more than five years.

"Markets are currently pricing in about a one-in-four chance that the central bank will raise interest rates at its meeting... setting a relatively high bar to tip the FOMC (Federal Open Market Committee) toward another rate hike."

Also in view this week are earnings from Dutch giant ASML and Taiwan's TSMC.

ASML is a critical cog in the global economy and a key bellwether for the semiconductor sector, while TSMC makes advanced processors for companies including Nvidia and Apple.

"After a strong first half (of 2026), semiconductor stocks have come under pressure as higher bond yields, geopolitical uncertainty and concerns about the scale of AI capital expenditure have prompted investors to reassess valuations," said Saxo Markets' Charu Chanana.

"The recent selloff across US and Asian chipmakers suggests that strong demand alone may no longer be enough to sustain the rally."

The results of ASML and TSMC "offer a useful health check on the AI investment cycle".

"TSMC tells us whether demand for advanced chips continues to accelerate, while ASML tells us whether chipmakers are investing in enough equipment to meet that demand."

Crude prices rose more than one percent as worries swirled over the Middle East crisis, with Iran stepping up attacks in the Strait of Hormuz and Houthis pressing ahead with their strikes on oil kingpin Saudi Arabia.

UK Maritime Trade Operations said four tankers were struck in the waterway on October 11, which Bloomberg said was around double the average the agency had seen the week before.

Meanwhile, Saudi Arabia and the Houthi anti-government forces in Yemen exchanged attacks following deadly strikes on Riyadh's international airport and energy sites in recent days.

- Key figures at around 0230 GMT -

Tokyo - Nikkei 225: UP 0.6 percent at 68,193.13 (break)

Hong Kong - Hang Seng Index: DOWN 0.2 percent at 24,291.19

Shanghai - Composite: UP 0.1 percent at 3,805.98

West Texas Intermediate: UP 1.2 percent at $95.24 per barrel

Brent North Sea crude: UP 1.2 percent at $106.96 per barrel

Euro/dollar: UP at $1.1205 from $1.1200 on Tuesday

Pound/dollar: UP at $1.3266 from $1.3256

Dollar/yen: UP at 158.37 yen from 158.32 yen

Euro/pound: DOWN at 84.47 pence from 84.49 pence

New York - Dow: DOWN 0.4 percent at 51,670.10 (close)

London - FTSE 100: DOWN 0.1 percent at 10,650.33 (close)

Y.Mori--JT