Asian Markets Slide as Tech Stocks Drop Ahead of U.S. Payrolls

Asian Markets Start the Week Lower

Asian markets slid Monday as tech stocks declined and investors positioned cautiously ahead of key U.S. payroll data that could reshape expectations for Federal Reserve policy. The region’s two largest exporters of technology hardware, Japan and South Korea, bore the brunt of the losses, while China defied the trend with modest gains.

Japan’s Nikkei shed nearly 1% as profit-taking in semiconductor-linked names accelerated, while South Korea’s KOSPI dipped 0.5% on weakness in chipmakers. Across the broader region, sentiment was muted, with investors unwilling to make aggressive bets before the release of U.S. jobs data later this week.

Payrolls in Focus

The U.S. nonfarm payrolls report due Friday is expected to show a modest gain of around 75,000 jobs alongside a slight uptick in unemployment. For global markets, the results will be decisive:

A weaker-than-expected reading would strengthen bets on a Fed rate cut in September, pressuring the dollar and boosting risk assets.
A strong print could dampen those hopes, lifting yields and potentially extending the selloff in equities.

“The jobs report is the single most important event risk this week,” one Singapore-based strategist said. “Markets are drifting on technicals until we get clarity on the Fed’s path.”

Tech Sector Drives Declines

The technology sector led the retreat, with Japanese chip-testing giant Advantest sliding nearly 9% after a blistering rally of almost 50% in recent months. South Korea’s Samsung and SK Hynix also lost ground as traders locked in profits.

Analysts said the selloff was less about fundamentals and more about overbought conditions. Still, the pullback underscored how sensitive Asia’s markets are to swings in global technology sentiment.

China Defies the Trend

China provided a rare bright spot. The CSI 300 index rose 0.4%, supported by stronger-than-expected manufacturing PMI data and optimism around the country’s booming AI sector. Beijing’s recent support measures also boosted confidence, with investors betting that China’s growth story remains insulated from U.S. payroll uncertainty.

“China is currently playing its own game,” said one Hong Kong-based analyst. “While global markets are preoccupied with U.S. payrolls, domestic stimulus and AI optimism are driving flows into Chinese equities.”

Broader Market Ripples

The caution in Asia spilled into currencies and commodities:

Currencies: The dollar softened slightly, giving room for the yen, euro, and sterling to strengthen. Emerging-market currencies including the Indian rupee also firmed modestly.
Commodities: Gold ticked higher on safe-haven demand, while oil prices eased amid expectations of stronger OPEC+ supply.
Bonds: Asian bond markets held steady, reflecting a wait-and-see approach to the week’s economic data.

Regional Breakdown

Japan and South Korea: Tech-Led Pressure

The heavy weighting of semiconductor stocks dragged indices lower, highlighting profit-taking after months of strong gains.

China: Bucking the Trend

Domestic policy support and AI-led optimism helped Chinese equities rise, even as peers across the region faltered.

Southeast Asia: Mixed Picture

Markets in Indonesia and Thailand dipped slightly, reflecting broader caution. Australia’s ASX held flat, supported by stronger job ads data.

Looking Ahead

With payrolls looming, Asia’s markets are expected to trade sideways, with volatility likely to spike later in the week. Traders remain wary of overcommitting until U.S. economic data provides clarity on whether the Fed will follow through on rate-cut expectations.

The Bottom Line

Asian markets slid on Monday as tech stocks pulled back and investors awaited U.S. payrolls, which could decide the direction of Fed policy and global market sentiment. China bucked the regional trend with gains fueled by AI optimism, but for most markets, the week hinges on Friday’s labor data.