Asian shares have fallen as disappointing earnings forecasts from Facebook parent Meta Platforms hammered tech shares, while the yen’s slump past 155 per dollar for the first time since 1990 raised the spectre of intervention from Tokyo.
A 15 per cent dive in shares of Meta after the Instagram parent forecast lighter-than-expected current quarter revenue and higher expenses soured the mood, sparking a sell-off in US tech and tech-related stocks.
The hit to Asian tech stocks took MSCI’s broadest index of Asia-Pacific shares outside Japan down 0.7 per cent on Thursday.
Japan’s Nikkei slid 1.3 per cent, while China stocks also fell, with the blue-chip CSI300 index down 0.3 per cent and Hong Kong’s Hang Seng Index 0.5 per cent lower.
In an earnings-packed week, the tech bellwethers are in the spotlight, with Alphabet, Microsoft and Intel due to report later on Thursday.
“If Meta is a guide, it seems the market is simply not tolerant of inline – if you’ve had a good run through Q1 and Q2 you either blow the lights out, or the market takes its pound of flesh,” said Chris Weston, head of research at Pepperstone.
Tech stocks had a boost on Wednesday after Tesla said it would introduce “new models” by early 2025 using its current platforms and production lines.
Investor focus will also be on the first-quarter US gross domestic product data on Thursday and personal consumption expenditures for March on Friday.
A hotter-than-expected consumer price inflation report for March had pushed back expectations of when the Fed will begin cutting interest rates, with markets pricing in a 70 per cent chance of September being the starting point, CME FedWatch Tool shows.
The shifting expectations of US rates have lifted Treasury yields and the dollar.
Against a basket of currencies, the dollar was little changed at 105.75. The index is up more than four per cent in 2024.
The yen, which is sensitive to US Treasury yields, has felt the brunt of the dollar’s ascent and is down nine per cent in 2024, the worst-performing G10 currency.
On Thursday, the yen was fetching 155.445 per dollar, having touched a 34-year low at 155.45 earlier in the session, breaching past the key 155 yen level that some traders had marked out as a line in the sand that would prompt Tokyo to take action.
The Bank of Japan started its two-day meeting on Thursday to discuss monetary policy, with expectations the central bank will keep its short-term interest rate target unchanged.
The attention, though, will be on governor Kazuo Ueda’s comments as he tries to maintain a path to exiting ultra-easy rates without upending the currency.
Oil prices eased as concerns about a potential slowdown in the US economy outweighed worries over the risk of an expanding conflict in the Middle East.
US crude fell 0.08 per cent to $US82.74 per barrel and Brent was at $US87.99, down 0.03 per cent.
Spot gold added 0.2 per cent to $US2,320.32 an ounce.