Asia opens defensive, tracking Friday's chip-led Wall Street rout, a VIX spike and a firmer oil bid that keep the risk-off tone alive into the Monday cash open.
Friday set the tone: the S&P 500 lost 1.01% to end at 7,457.69, the Nasdaq Composite dropped 1.4% to 25,520.24, and the Dow fell 406.55 points, or 0.77%, to 52,146.42. The selloff was semiconductor-led, with semiconductor manufacturers plunging on concerns hyperscalers may scale back AI infrastructure spend, fears fueled by improvements in Chinese AI models including Moonshot's Kimi release. That's the read-through pressuring chip-heavy Kospi and pulling Hang Seng back toward its channel, where investors have accepted lower prices to exit and the index is testing support at 24,400, overall assessed as technically negative for the medium long term. Nikkei's uptrend is intact but frayed short term — the index is in a rising trend channel but has broken a support level in the short term. CSI 300 likely grinds sideways, partly shielded by policy support.
USD/JPY holds firm near 162.39, with the yen carry trade still the marginal driver as the 10-year JGB reached a new 30-year high near 2.82%. USD/CNH stays contained under PBOC fixing discipline — the pressure valve if outflows accelerate. Into the U.S. open it's earnings, not policy: the FOMC's decision doesn't land until July 28-29, and FactSet forecasts S&P 500 Q2 earnings growth of 23.1% year-over-year after Goldman Sachs popped 9% on its beat.
The risk: mega-cap tech earnings this week confirming capex isn't slowing snaps the chip complex back hard and flips Asia's read-through; alternatively, an oil bid persisting on Mideast escalation alongside yen weakness risks BOJ intervention chatter that broadens the VIX spike into a wider deleveraging.