Asian Markets Tumble, Kospi Plunges Nearly 6%
Asia-Pacific stock markets weakened in trading on Wednesday (19/8/2026), with the South Korean bourse among the hardest hit. The Kospi index plunged 5.89%, while the small-cap Kosdaq index fell 3.62%. In Japan, the Nikkei 225 declined 1.04% and the Topix index slipped 1.01%, while Australia’s benchmark S&P/ASX 200 weakened 0.50%.
Pressure on Asian markets came as technology shares fell amid a surge in bond yields in the United States and several other countries. Rising long-term bond yields have become a concern for investors because they can increase funding costs while reducing the attractiveness of equity valuations, particularly in the technology sector.
The yield on 30-year US Treasury notes hit a fresh 19-year high on Tuesday (18/8/2026). In Japan, the yield on 10-year government bonds reached its highest level in three decades. Yields also rose in Europe, with Germany’s 30-year government bond yield reaching its highest level since 2011, while France’s 30-year government bond yield touched its highest level since 2008.
Although long-term bond yields have reached multi-decade highs, the stock market reaction has so far been considered relatively limited. Investors are still betting that continued economic growth and historically strong corporate earnings can support equity markets despite rising yields.
Adam Parker, founder and CEO of Trivariate Research, said the US economy remains strong enough to support the stock market. He believes earnings and cash flows at large companies are also solid enough to weather various pressures that may arise from rising yields. “I think ultimately the economy is strong enough,” Parker said in an interview with CNBC, quoted on Wednesday (19/8/2026). According to him, the strength of earnings and cash flows at large companies can help the market navigate the current turbulence.
Investor attention now turns to the minutes of the Federal Open Market Committee (FOMC) meeting, due to be released on Wednesday afternoon US time. The minutes will be closely watched given the sharp differences of opinion within the US central bank, the Federal Reserve. At the July FOMC meeting, three officials dissented and voted for a rate hike. Investors will scrutinise the minutes for a more detailed picture of the disagreements among Fed officials regarding the direction of monetary policy.
Beyond monetary policy, market attention is also focused on the ongoing US retail earnings season. Target, TJX, and Lowe’s are scheduled to report earnings before the market opens on Wednesday, while semiconductor company Analog Devices will also report its results.