Dollar Dips as Stock Rally Pauses on Tech Valuations – Asia Market Wrap

The rapid surge in global markets came to a standstill as concerns grew that technology values had risen too far.

Asian stocks slumped 0.8%, mirroring drops in the US, with technology firms pulling down Japan and China. SMIC fell 7% on news that brokerages had reduced the stock’s margin financing ratio to zero, citing high valuations. A barometer of Chinese technology equities in Hong Kong was poised for its worst week since early August. Equity-index futures in Europe and the US were flat.

The Dollar fell after a four-day rise that had lifted it to its highest level since early August. According to sources, the currency was on track for its largest weekly increase since mid-November 2024. Gold’s losses widened, while oil suffered its largest drop in a week.

Global stocks were likely to fall for the second time in three weeks as investors paused after a strong recovery from April’s lows, when tariff announcements jolted markets. The growth in AI-focused technology companies has sparked debate over whether prices are outpacing fundamentals.

The Yen was on track for its worst weekly fall in a year, even as Japan’s new ruling-party leader, Sanae Takaichi, a pro-stimulus politician, stated that she did not support an extremely weak currency.

Takaichi will meet with her governing coalition counterpart on Friday afternoon, raising concerns about the possibility of a breakdown in the 26-year collaboration that has served as the foundation of Japan’s political stability.