KOSPI rebounds as chip stocks recover while Nikkei 225 slides on bond shock

Asian equity markets experienced volatility on Tuesday as surging sovereign bond yields and elevated energy prices weighed on regional sentiment. Japan's benchmark Nikkei 225 declined approximately 1% to trade near 65,647, primarily weighed down by heavy selling across semiconductor and technology shares. Valuation pressures intensified significantly as Japan's 10-year government bond yield touched 3% for the first time since 1996, while markets priced in a 73% probability of an upcoming interest rate hike by the Bank of Japan. In contrast, South Korea's KOSPI demonstrated notable resilience, recovering from an initial loss of over 1.2% to sit just 0.2% lower around 6,809. The turnaround was propelled by strength in key chipmakers, including Samsung Electronics and SK Hynix, bolstered by stellar August trade figures showing that semiconductor exports surged to a record $46.65 billion on strong AI memory demand. Broader markets maintained a cautious tone as Brent crude climbed above $91 per barrel following renewed US-Iran conflict, heightening inflation fears alongside rising US Treasury yields.