Asian stocks plunged on Friday following Wall Street’s selloff as Fed officials signaled caution on rate cuts. Bitcoin dropped below $100,000 for the third time this month, reflecting broader market anxiety.
As of 5:00 am UTC, Japan’s Nikkei fell 1.73% to 50,392. while South Korea’s KOSPI dropped 3% to 4,045.44. Hong Kong’s Hang Seng declined 1.13% to 26,767 as regional selling intensified. Australia’s S&P/ASX bucked the trend, losing 1.44% to 8,627.5.
Market Sentiment Turns Cautious
The selloff followed hawkish Fed comments that dampened hopes for December rate cuts. Traders now see only a 51% chance of a cut, down from 63% previously.
Bitcoin fell below the psychological $100,000 level amid persistent selling pressure in spot markets, and ETH went down by 8.33% in the previous 24 hours. The cryptocurrencies struggled to recover from October’s flash crash that triggered record liquidations. Binance Futures’ open interest remains depressed at $9 billion, well below October’s $12 billion peak.
Adding to crypto market woes, reports surfaced about potential Japanese regulations targeting cryptocurrency treasury companies. Japan Exchange Group, which operates the Tokyo Stock Exchange, allegedly signaled regulatory scrutiny. This news further chilled investor sentiment across digital assets.
Derivatives markets haven’t recovered from October’s massive deleveraging. The slow return of capital indicates traders remain risk-averse. Market participants await US economic data including retail sales.
Fed officials’ tone reflects inflation concerns despite market expectations for easing. Minneapolis Fed’s Kashkari opposed last month’s cut. Cleveland Fed’s Beth Hammack emphasized restrictive policy.
This uncertainty weighs heavily on risk assets globally. Gold lost 0.6% overnight while oil faces third consecutive weekly decline. The dollar retreated despite higher yields, signaling complex cross-asset dynamics.
