Asian Markets Tumble as US Economic Data Raises Recession Fears
Asian markets and US Treasury yields plunged on Friday, August 2nd, as weaker-than-expected US factory data sparked fears of a worsening economic outlook. The Nikkei 225 index in Tokyo plunged more than 2,000 points, while the broader MSCI index of Asia-Pacific shares outside Japan slumped 0.8%.
The weak data, which showed a decline in US manufacturing activity and a rise in unemployment claims, spooked investors and triggered a broad risk-off sentiment across markets. This occurred despite the Federal Reserve's signal earlier in the week that a rate cut could come as soon as September.
Geopolitical tensions also weighed on sentiment, following the reported deaths of Hamas leaders Mohammed Deif and Ismail Haniyeh.
The Japanese yen and Swiss franc rose as safe-haven assets, while the 10-year Treasury yield fell to a six-month low. The focus now turns to the US nonfarm payrolls report later on Friday for further clues on the health of the labor market and the broader economy.