Nikkei Slides 3.16% as Chip Stocks Slump; FOMC Minutes Loom
As of 2026-08-19 17:00 SGT
Key points
- Asian equities sold off sharply. The Nikkei 225 closed down 3.16% at 65,326, dropping over 2,300 points intraday at the low, as the overnight US chip-stock rout spread into Tokyo tech names.
- South Korea's KOSPI triggered a circuit breaker as the chip-stock selloff hit the region, part of a broader risk-off mood tied to UAE-Iran tensions and France's expulsion of Iranian diplomats.
- FX trade favored the dollar sellers. USD/JPY stayed heavy in the low 159s, while EUR/USD advanced to 1.1601 as the greenback softened into tonight's FOMC minutes.
- The 30-year Treasury yield touched 5.33%, a fresh 19-year high, before yields pulled back somewhat; the 10-year now sits at 4.706% (-1.8bp) ahead of the minutes.
- US stock futures were little changed after the S&P 500 posted its third straight losing day, with traders positioning for tonight's FOMC minutes release.
Market snapshot
| Instrument | Level | Change |
|---|---|---|
| USD/JPY | 159.17 | -0.25% |
| EUR/USD | 1.1601 | +0.21% |
| Nikkei 225 (close) | 65,326 | -3.16% |
| Hang Seng (close) | 25,495 | +0.16% |
| Dow futures | 53,405 | +0.00% |
| S&P 500 futures | 7,720.25 | +0.08% |
| Nasdaq 100 futures | 29,624 | +0.13% |
| Gold futures | 4,414.50 | -0.14% |
| WTI crude | 84.61 | +0.65% |
| Bitcoin | 64,367 | -0.49% |
| US 10-yr yield | 4.706% | -1.8bp |
Foreign exchange — Dollar sellers keep the upper hand
USD/JPY remains capped in the low 159s, unable to build on the modest bounce as the pair holds within the prior session's 159.65-159.05 range. EUR/USD extended its rebound to 1.1601, up 0.21%, as the US Dollar Index slipped into the countdown to the FOMC minutes. Ahead of tonight's US data, the dollar's next move likely hinges on how hawkish the minutes read.
Equities — Chip-driven selloff spreads across Asia
The Nikkei's 3.16% slide was the region's standout move, with chip and AI-linked names bearing the brunt of the selling after Wall Street's semiconductor rout. Hong Kong's Hang Seng managed a modest 0.16% gain, but South Korea's KOSPI triggered a circuit breaker as the valuation unwind in chipmakers spread further. By tomorrow's Tokyo open, dip-buyers will need to see the chip-stock rout stabilize before sentiment turns.
Macro — All eyes on tonight's FOMC minutes
Tonight's release of the July FOMC minutes is the session's headline event; three participants reportedly voted for a hike at that meeting, and several others have since signaled openness to one if the data warrants it. The 30-year Treasury yield touched a 19-year high of 5.33% on inflation and spending concerns before easing back, with the 10-year now at 4.706% (-1.8bp). UK inflation accelerated to 2.9% y/y in July, a four-month high driven by higher energy costs tied to the Iran war, keeping the door open for another Bank of England hike this year. Once New York opens, the minutes' tone on hike appetite should set the tenor for yields and the dollar into Jackson Hole.
Commodities — Oil firm, gold holding its bounce
WTI crude held around $84.61 (+0.65%), staying firm on Hormuz-related supply concerns even as the day's price action stayed range-bound. Gold pulled back from the prior session's high near $4,434 toward $4,330 before stabilizing at $4,414.50 (-0.14%). Ahead of tonight's US data, gold's next leg likely depends on how real yields react to the FOMC minutes.
Geopolitics
The UAE reportedly suspended all trade and financial ties with Iran after Tehran allegedly fired a missile at the country, and Iran is said to be weighing retaliatory strikes on US-linked targets in Europe should President Trump escalate further. France's expulsion of Iranian diplomats added to the regional risk-off mood that hit Asian equities and the KOSPI overnight. Once New York opens, any fresh escalation headlines out of the Gulf remain the key tail risk for oil and safe-haven flows.
Upcoming events
| Time (SGT) | Region | Event | Impact |
|---|---|---|---|
| 08/19 18:15 | EU | ECB President Lagarde Speaks | Medium |
| 08/20 02:00 | US | FOMC Meeting Minutes | High |
| 08/20 02:30 | US | President Trump Speaks | Medium |
| 08/20 09:30 | AU | Employment Change (forecast 11.7K) | High |
| 08/20 09:30 | AU | Unemployment Rate (forecast 4.4%) | High |
| 08/20 20:30 | US | Philly Fed Manufacturing Index (forecast 24.1) | Medium |