(Bloomberg) — Asian stocks tumbled as sentiment was hit by a triple whammy of a selloff in Japanese equities, a worldwide tech rout and signs of weakness inside the US economy.

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The MSCI Asia Pacific Index plunged as much as 3.3%, probably probably the most since February 2022, with Taiwan Semiconductor Manufacturing Co., Mitsubishi UFJ Financial Group and Samsung Electronics Co. amongst a very powerful drags. Japan’s Topix Index headed for a technical correction, while benchmarks inside the tech-heavy markets of South Korea and Taiwan fell greater than 3.5%.

Traders took risk off the table amid signs the investment landscape is shifting. Japanese stocks are falling out of favor since the prospect of further interest-rate hikes by the country’s central bank supports the yen, hitting the shares of exporters. Meanwhile, disappointing earnings from US tech behemoths has cooled optimism over artificial intelligence, triggering a rout that has ensnared Asian chip giants.

“The recent strengthening of the Japanese yen coupled with tech sector weakness is poised to significantly impact the Asian stock market,” Manish Bhargava, a fund manager at Straits Investment Holdings in Singapore. “Given the substantial weight of tech stocks in Asian indices, disappointing results from tech giants could trigger a broader market downturn in Asian markets.”

MSCI’s Asia benchmark is heading in the precise direction for its third-straight week of declines. Regional losses also came after concerns over the health of the US economy emerged. Data Thursday showed unemployment claims hit an almost one-year high while manufacturing shrank. Investors could be monitoring payrolls data due later Friday for further clues on the state of the economy and the Federal Reserve’s rate path.

“The narrative is changing quickly after a confirmation of the FOMC’s September rate cut path. As manufacturing and job data are pointing toward recession levels, investors are literally questioning whether the Fed is cutting too late,” said Billy Leung, an investment strategist at Global X Management. “A US recession would also hurt Asia.”

Sectors to Watch

• Shares of Apple’s Asian suppliers fall since the iPhone maker’s sluggish China revenue marred its strong performance last quarter

• ImmuneOnco led gains in Chinese biotech stocks, soaring as much as a record 53% in Hong Kong, after the company entered a license and collaboration agreement for its antibody drug with US-based Instil Bio

• Macau casino stocks dropped in Hong Kong after gaming revenues missed analyst estimates again in July over crackdown fears

• Paladin Energy and other Australian uranium mining stocks followed their overseas peers lower after the world’s top producer of the nuclear reactor fuel increased its full-year production guidance.

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Markets at a Glance

• MSCI Asia Pacific Index down 3%

• Japan’s Topix Index fell 5.1%; Japan’s Nikkei Index fell 4.9%

• China’s CSI 300 Index fell 0.6%; Hong Kong’s Hang Seng Index fell 2%; Hong Kong’s Hang Seng China Enterprises Index fell 1.8%

• Taiwan’s Taiex Index fell 4.3%

• South Korea’s Kospi Index fell 3.5%; South Korea’s Kospi 200 Index fell 3.9%

• Australia’s S&P/ASX 200 Index fell 2.1%; Latest Zealand’s S&P/NZX 50 Gross Index fell 0.3%

• India’s NSE Nifty 50 Index fell 0.9%

• Singapore’s Straits Times Index fell 0.9%; Malaysia’s KLCI Index fell 0.7%; Philippines’s PSEi Index fell 1.6%; Indonesia’s JCI Index fell 0.2%; Thailand’s SET Index fell 0.6%; Vietnam’s VN Index fell 1.1%

• 10-year Treasury yield fell 1.2 basis points

• Bloomberg Dollar Index fell 0.1%

• West Texas Intermediate crude rose 0.6% to $77 a barrel

• Euro rose 0.1%

Here Are the Most Notable Movers

• Zomato’s shares rally to a record in India after the delivery firm’s quarterly profit beat the everyday analyst estimate, driven by higher-than-expected margins in its food business.

• Engineering solutions provider Seatrium’s shares drop as much as 9.5%, probably probably the most since June 18, after it booked S$69.9 million ($52.3 million) provision for onerous contracts in the first half of the 12 months.

• Oversea-Chinese Banking Corp. shares are little modified amid a broad market selloff, after the Singapore-based bank implied it trimmed its full-year net interest margin forecast.

• Brilliance China’s shares rise as much as 6.1% in Hong Kong, bucking a broader market selloff, after Citigroup raised its price goal and opened a 30-day positive catalyst watch citing a possible upbeat dividend surprise.

• Toyota Motor shares drop for a second day, sliding as much as 6% on Friday to the underside since December, as the overall Japanese market is hit by one other selloff. The carmaker posted its quarterly results during market hours on Thursday, when shares prolonged losses to greater than 8%.

Notes From the Sell-Side

Related Market News:

• Taking Stock: India’s stocks usually tend to extend their record rally as investors bet on strong earnings growth and foreign inflows expand.

• Inside Asia: Asian currencies gain against the dollar, buoyed by signs of a Fed rate cut in September. Ringgit beat all regional peers, while rising to a near 12-month high versus the greenback on an expected recovery inside the export cycle.

• Global Wrap: Japanese stocks plunged for a second day on expectations for further monetary tightening inside the country, exacerbating a worldwide selloff following weak US economic data and tech earnings.

• Singapore has established a review group to revive its stock market amid growing calls for initiatives to tackle poor liquidity.

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Abhishek Vishnoi.

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