Short-term volatility in the stock market continues as analysts from UBS Chief Investment Office suggest that the US dollar has not yet stabilized against the Japanese yen. According to a recent research report, it is premature to assume that the Japanese stock market has reached its lowest point. The analysts anticipate that any potential recovery may not materialize until Japanese companies release their first-half earnings in October or possibly after the US presidential election in November.
The global markets experienced a significant downturn due to concerns about a possible recession in the US economy and the swift unwinding of popular carry trades involving the yen. Moody's Analytics analysts highlighted that much of the market decline is driven by fears of a looming recession in the US.
In addition to economic concerns, AI-related tech stocks faced challenges, impacting equity valuations in Taiwan and South Korea. These countries are major producers of high-end semiconductors used in AI applications. The decline in these tech stocks further contributed to the overall market instability.
