Japanese Equities Plunge On Weak Earnings, Soft Tech Prices & BoJ Hikes

Japanese stocks plunged for a second day as after US equities fell on weak ISM data with tech stocks also selling off on disappointing earnings from Apple & Amazon, while expectations rose for more rate hikes by the BoJ.

• Financials are struggling today after Daiwa fell as much as 21% on 1Q profit miss, this dragged down other financials with Nomura off about 9%. The Topix Bank Index is down 8.30%.
• Semiconductor stocks continue the recent trend with heavy selling across the sector, after the Philadelphia SE Semiconductor Index fell 7.14% overnight. Tokyo Electron is currently trading down 12% and is now down 31% from the July highs.
• In some positive news he US is preparing to exempt Japanese semiconductor-equipment makers from new trade restrictions targeting China, this was behind the rally on Thursday in the sector. The move is part of a broader package of measures to curb China's technological advancements, but Japanese firms may still face constraints on selling to China in the future.
• Local markets: Nikkei 225 -5.10%, Topix -5.45% with the Topix Core 30 -6.12%, in FX the USDJPY is steady at 149.70 while the JGB curve has bull-flattened with yields 2-8bps lower with the 10y yields back below 1%