Asian stocks fell sharply on Friday, tracking Wall Street's steep decline, as major benchmarks in the region reversed gains from the previous day. Japan's Nikkei 225 dropped 2.4% to 48,645.95, weighed by ongoing concerns over a potential bubble in artificial intelligence-related shares and stronger-than-expected US jobs data that reduced the likelihood of a Federal Reserve interest rate cut in December.
Investors are awaiting a stimulus package announcement from Prime Minister Sanae Takaichi, with plans for higher government spending putting pressure on the yen and Japanese government bonds. Data released on Friday showed Japan's annual inflation rate rose to 3.0% in October 2025, up from 2.9% in September. Meanwhile, Japan's exports to the rest of the world increased in October, but shipments to the US fell due to higher tariffs imposed by President Donald Trump.
South Korea's KOSPI tumbled 3.9% to 3,847.91, reversing Thursday's gains, with Samsung Electronics sinking 5.8% and SK Hynix plunging 8.6%. In China, Hong Kong's Hang Seng index skidded 2.3% to 25,237.94, while the Shanghai Composite index slid 1.8% to 3,860.77, pressured by escalating friction between China and Japan over Taiwan. Australia's S&P/ASX 200 fell 1.5% to 8,425.30, and Taiwan's Taiex retreated nearly 3.2%.
“What began as a textbook 'Nvidia bounce' flipped into one of the most violent intraday reversals since the April dump, and Asia — ever the obedient understudy — marched directly into the same plunge tank on the open,” said Stephen Innes of SPI Asset Management.
On Thursday, Wall Street experienced jarring swings, with the S&P 500 erasing early gains to fall 1.6% to 6,538.76, the Dow Jones Industrial Average dropping 0.8% to 45,752.26, and the Nasdaq composite sinking 2.2% to 22,078.05. The sharpest losses hit former market winners such as Nvidia and cryptocurrencies, with Bitcoin dropping below $87,000 from nearly $125,000 last month. Concerns over overvalued AI stocks and the possibility that the Federal Reserve may pause interest rate cuts contributed to the market's skittishness.
In commodity and currency markets, US benchmark crude oil slid 77 cents to $58.23 per barrel, while Brent crude lost 68 cents to $62.70 per barrel. The US dollar fell to 157.39 Japanese yen from 157.42 yen, and the euro rose to $1.1539 from $1.1531.
