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Taiwan Stocks Down More Than 4% in Mixed Asia Trade as TSMC Plunges 8%

Toru Hanai | Bloomberg | Getty Images

This is CNBC's live blog covering Asia-Pacific markets.

Shares in the Asia-Pacific were mixed on Tuesday, while Taiwan's benchmark index fell 4.35% to 13,106.03 on its return to trade after a holiday, as investors weighed the impact of new U.S. rules on chipmaker TSMC.

Japan and South Korea's markets also resumed trading after a holiday on Monday. The Nikkei 225 fell 2.64% to 26,401.25 and the Topix lost 1.86% to 1,871.24. In South Korea, the Kospi fell 1.83% 2,192.07 and the Kosdaq shed 4.15% to 669.50.

Hong Kong's Hang Seng index fell 2% in the final hour of trade and the Hang Seng Tech index dropped 3.16%. In Australia, the S&P/ASX 200 gave up earlier gains to closed 0.34% lower at 6,645.

Mainland China markets bucked the trend regionally, with the Shanghai Composite gaining 0.19% and the Shenzhen Component rising 0.529%. MSCI's broadest index of Asia-Pacific shares outside Japan fell around 2%.

"Equities continue to sell off as the impact of tighter monetary policy spooks investors," ANZ Research analysts wrote in a note Tuesday.

Overnight on Wall Street, the Nasdaq Composite closed at its lowest since July 2020, down 1.04% at 10,542.10, dragged lower by a slump in semiconductor stocks.

The S&P 500 also slipped 0.75% to 3,612.39, while the Dow Jones Industrial Average shed 93.91 points, or 0.32%, to close at 29,202.88.

— CNBC's Carmen Reinicke and Alex Harring contributed to this report.

'Cash is king' when financial assets are so volatile, strategist says

Now is not a good time to own financial assets as stocks, fixed income and currencies have registered "extreme levels of volatility" this year, according to Mehvish Ayub, a senior investment strategist at State Street Global Advisors.

"We typically tend to use a variety of asset classes for diversification purposes — and the issue that we're faced with is, what do we own for diversification at the moment?" she said.

Commodities and bonds are not options, she added.

"That is why cash is king, we are still very defensive."

— Abigail Ng

Japan may not intervene even if the yen weakens past levels seen in previous intervention

Authorities in Japan may not step in even if the yen weakens past 145.89 — the level at which they intervened in September, according to Carol Kong, an economist at Commonwealth Bank of Australia.

She wrote in a note that Japanese officials have recently reiterated that "it is the speed of change rather than the level," that will trigger intervention. The yen touched 145.86 against the dollar on Tuesday, but last changed hands at 145.65.

However, Kong pointed out this week's inflation data in the U.S. is a "key event risk." If the consumer price index remains high, U.S. Treasury yields could jump and the dollar-yen could pop.

"The BOJ may intervene to buy JPY if the sell-off is considered excessive. But we maintain any intervention-induced moves in USD/JPY will be unwound within a few weeks," Kong said.

Japan's yen has weakened sharply as it keeps interest rates extremely low, while the U.S. Fed aggressively hikes rates. But authorities have signaled a willingness to stick with loose monetary policy. Prime Minister Fumio Kishida told the Financial Times that the Bank of Japan should maintain its policy until wages rise.

— Abigail Ng

Japan may not intervene even if the yen weakens past levels seen in previous intervention

Authorities in Japan may not step in even if the yen weakens past 145.89 — the level at which they intervened in September, according to Carol Kong, an economist at Commonwealth Bank of Australia.

She wrote in a note that Japanese officials have recently reiterated that "it is the speed of change rather than the level," that will trigger intervention. The yen touched 145.86 against the dollar on Tuesday, but last changed hands at 145.65.

However, Kong pointed out this week's inflation data in the U.S. is a "key event risk." If the consumer price index remains high, U.S. Treasury yields could jump and the dollar-yen could pop.

"The BOJ may intervene to buy JPY if the sell-off is considered excessive. But we maintain any intervention-induced moves in USD/JPY will be unwound within a few weeks," Kong said.

Japan's yen has weakened sharply as it keeps interest rates extremely low, while the U.S. Fed aggressively hikes rates. But authorities have signaled a willingness to stick with loose monetary policy. Prime Minister Fumio Kishida told the Financial Times that the Bank of Japan should maintain its policy until wages rise.

— Abigail Ng

Japan's current account surplus shrinks in August

Japan's current account surplus for August shrank to 58.9 billion yen ($404 million), data from the finance ministry showed. That's a 96.1% plunge from the same period a year ago.

Economists polled by Reuters expected a surplus of 121.8 billion yen in August. The current account surplus stood at 229 billion yen in July.

Imports grew at a faster pace than exports, with the weaker yen causing import prices to surge.

Read more here.

— Abigail Ng

CNBC Pro: Is it time to buy gold? Wall Street pros weigh in as prices fall

Gold has come under pressure this year, with the dollar's big gain weighing on gold prices. 

Spot gold was trading down 1% at $1,676 per ounce Monday — near a 2.5-year low. So is now the time to buy? CNBC Pro asked several market watchers for their thoughts.

Pro subscribers can read more here.

— Zavier Ong

Currency check: Australian dollar facing 'perfect storm,' Japanese yen close to intervention levels

The Australian dollar has been facing "something of a perfect storm" since the start of the week, according to Rodrigo Catril, a currency strategist at the National Australia Bank.

The currency, which is highly sensitive to China's economic fortunes, has lost ground following China's weak purchasing managers' index data and new U.S. rules on chip exports to China. It last lost about 0.6% and is trading at $0.6266.

China's onshore and offshore yuan also weakened and last changed hands at 7.19 per dollar.

Meanwhile, Japanese yen weakened against the U.S. dollar to trade at 145.70. That's hovering close to this year's low of 145.89 per dollar, which prompted intervention from authorities in September.

The Japanese currency strengthened to 140-levels following the intervention, but has since largely weakened.

— Abigail Ng

CNBC Pro: China's tech stocks are tumbling, but short sellers have a different sector in their sights

Chinese tech stocks are down by 20% this year — but short sellers are targeting a different sector.

Some $742 million of new bearish bets were placed on one Chinese sector in particular in the third quarter. That compares to a reduction of around $150 million in shorts on the tech sector.

CNBC Pro subscribers can read more here.

— Ganesh Rao

TSMC shares plunge 7% on U.S. export limits

Shares of the world's largest chipmaker, Taiwan Semiconductor Manufacturing Company, dropped as much as 7.1% on its return to trade after a holiday on Monday. The stock was reacting to news of U.S. export controls on high-end tech that are meant to limit China's ability to buy and manufacture advanced semiconductors used in military equipment.

TSMC, a heavyweight on the Taiex, dragged the broader market down by around 3% Tuesday morning.

Market intelligence company TrendForce wrote that the U.S. rules will affect non-Chinese firms such as TSMC, Samsung and SK Hynix.

"In the future, whether the situation is American factories no longer being able to export to the Chinese market or Chinese factories being unable to initiate projects and mass produce wafer starts, it will all have a negative impact on the future purchase order status of TSMC's 7 [nanometer] and 5nm processes," a press release on TrendForce's website said.

Samsung Electronics' shares lost 3.9% and SK Hynix shed 3.5% at session lows.

— Abigail Ng

U.S. Treasury yields climb, 30-year hits highest level since 2013

The yield on the 30-year U.S. Treasury note climbed as high at 3.941%, reaching its highest level in nine years.

The 10-year yield rose to 3.963% and the 2-year yield inched higher to 4.318%. Rates fell earlier this month but started to rise again after positive economic data in the U.S. led investors to increase bets on further rate hikes by the Fed.

Bond yields move inversely to prices and one basis point is equivalent to 0.01%.

— Abigail Ng

CNBC Pro: Wall Street is bullish on some corners of tech again, as Citi gives one stock 115% upside

Some Wall Street banks have started making the case for buying into tech again, naming specific sectors they are bullish on.

Citi and Morgan Stanley both said they have upgraded tech to overweight.

CNBC Pro subscribers can read more about the areas they are looking at and the global stocks to buy.

— Weizhen Tan

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