Japan’s confirmed currency intervention strengthens the yen, pressuring exporters, while South Korea’s KOSPI slumps 4% on AI chip demand concerns.
Japan’s Nikkei 225 fell over 2% Monday as a sharp yen rally, driven by confirmed joint US-Japan intervention, squeezed export-heavy stocks. Automakers and other multinationals faced profit margin pressures as the stronger currency eroded overseas earnings when repatriated. The dollar weakened from around 160.20 yen, amplifying concerns for exporters reliant on foreign revenue.
South Korea’s KOSPI slumped 4%, led by a selloff in Samsung and SK Hynix, which together make up more than half the index. Despite strong earnings last week, doubts persist over AI chip demand and hyperscaler spending sustainability. The KOSPI’s 22% decline in July marked its worst month since the 2008 financial crisis, signaling fragile sentiment in semiconductor-linked equities.
The divergence highlights regional risks: Japan’s currency-driven pressure on exporters contrasts with South Korea’s sector-specific downturn. Traders are monitoring both trends as markets assess whether the selloff will deepen or stabilize in the near term.