KOSPI rises as chip stocks recover; Nikkei falls on 3% JGB yield

Asian equity markets diverged as a global rise in bond yields and higher oil prices pressured regional markets. South Korea’s KOSPI recovered from an early drop, while Japan’s Nikkei 225 fell on a sharp rise in Japanese government bond yields.

Tokyo’s benchmark slipped about 1% to 65,647 in morning trade, with technology stocks leading losses. Tokyo Electron dropped about 4.1%, Lasertec fell roughly 3.1% and Renesas Electronics declined about 3%. The 10-year Japanese government bond yield reached 3% for the first time since 1996. The yen remained near 160 per dollar and markets priced about a 73% chance of a Bank of Japan rate increase this month. US Treasury Secretary Scott Bessent has publicly suggested Japan needs further monetary tightening.

In Seoul, the KOSPI fell more than 1% shortly after the open but recovered to trade about 0.2% lower near 6,809 by late morning as chip stocks rebounded. Samsung Electronics dropped more than 2% in early trade before nearly erasing the loss. SK Hynix moved from an early fall of about 1.2% to a gain near 2% later in the session. POSCO Holdings advanced more than 2%.

South Korea’s August trade data showed exports rose 68.7% year-on-year to $98.26 billion. Semiconductor shipments nearly tripled to a record $46.65 billion, reflecting continued demand for AI-related memory and supporting semiconductor-related stocks.

Elsewhere in the region, MSCI’s Asia-Pacific index slipped about 0.2%. Australia’s S&P/ASX 200 fell around 0.4% and Hang Seng futures were down by a similar margin.

Brent crude climbed above $91 after the United States and Iran exchanged strikes for the first time in about a month, reducing hopes that shipping through the Strait of Hormuz would normalize quickly. Higher energy costs are contributing to upward pressure on inflation expectations.

US Treasury yields also rose, with the 10-year benchmark approaching 4.78%, its strongest level since early 2025. Fed Chair Kevin Warsh used the Jackson Hole forum to reiterate a readiness to tighten policy if inflation does not ease.

Chris Larkin of E*Trade warned that “unexpectedly strong US labour data this week could now be treated negatively by markets because it would strengthen the case for a September rate increase.”

Higher global yields weighed on growth-oriented and expensive tech stocks, while a weak yen and rising oil prices increased import and input costs for Japan. Market participants are watching upcoming economic data and central bank communications for further direction as bond yields and energy prices remain volatile.