The Taiwan dollar and South Korean won led Asian currency losses as a Wall Street semiconductor selloff spilled into regional markets. Taiwan's currency fell up to 0.8% while local shares dropped over 3%, their sharpest decline since July. South Korea's won declined 1% with shares down nearly 8%, heading for the lowest close since April.
The retreat highlights how deeply North Asia's export-reliant economies are tied to the global chip cycle. A US semiconductor gauge erased $1.6 trillion in market value during a six-day losing streak amid concerns over high interest rates, lofty valuations, and massive AI spending. MSCI's Asia Pacific equities gauge fell nearly 3%.
"The Korean won and Taiwan dollar, both proxies for the global tech cycle, have come under pressure amid the sharp selloff in technology stocks," said Christopher Wong, strategist at Oversea-Chinese Banking Corp. Hotter US inflation added to risk aversion, though pullbacks in Treasury yields and oil prices may provide some offset.
Taiwan's slump was driven by foreign capital outflows and exporter dollar hoarding. State-owned banks sold dollars to provide liquidity. Foreign investors dumped NT$165.3 billion ($5.1 billion) of Taiwanese equities Tuesday, the third-largest one-day outflow since 2000. In South Korea, foreign funds sold $1.8 billion of Kospi equities Thursday morning, pushing October outflows past $10 billion.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing