Semiconductor-related equities bore the brunt of the correction. Advantest plummeted 15%, while Lasertec and Kokusai Electric retreated 14% and 13% respectively. This regional downturn tracked an overnight slump on Wall Street, triggered by a hotter-than-anticipated U.S. inflation report that forced a recalibration of Federal Reserve interest-rate expectations. With 10-year Treasury yields climbing past 5%, capital-heavy tech ventures are facing intense scrutiny over their long-term revenue viability.

Debt-funded expansion in the AI sector is showing signs of strain, as evidenced by a 15% drop in U.S. data-center operator CoreWeave following a surge in its bond yields. The volatility extended beyond Japan, with South Korea’s Kospi sliding 7.6% and Taiwan’s Taiex falling 3.4%. Analysts warn that this instability is likely to persist as the earnings season begins, testing whether major technology firms can justify their recent peak valuations against the backdrop of persistent inflation and a "higher-for-longer" monetary policy.