Asian technology and semiconductor stocks fell broadly during trading on October 22, 2026, cooling risk appetite and making the yen the strongest-performing major currency. The Australian and New Zealand dollars underperformed, while the Swiss franc also remained firm. After AUD/JPY stalled in the 111.04-111.19 resistance zone, it broke support near 110.37, suggesting the rebound from 108.62 may have ended at 111.30. USD/JPY also slipped toward 156.36, a level that could determine whether a broader downside reversal is developing.
Yen Leads as Asian Equities Retreat
The yen and Swiss franc led the major currencies in Thursday's Asian session, followed by the Canadian dollar, euro, pound and US dollar. The Australian and New Zealand dollars ranked last, a clear shift from Wednesday, when the Australian dollar led after markets raised expectations for further tightening by the Reserve Bank of Australia.
USD/JPY fell from an intraday level near 158.14 to around 157.04, breaking below the previous support area at 157.50. AUD/JPY declined to roughly 110.26, while EUR/JPY eased to about 176.75. The US Dollar Index also fell around 0.2% to near 101.50, indicating that the yen's strength was not simply the result of broad-based US dollar weakness.
Exchange-rate moves remain relatively contained, however. Whether the yen's advance can continue will depend in part on whether defensive flows spread into the European and US sessions.
Technology Stocks Drive Losses Across the Region
Asian equity markets fell broadly, with technology and semiconductor stocks bearing the brunt of the selling. The Hang Seng Index dropped 3.1%, South Korea's KOSPI fell 3.5%, the Nikkei 225 declined 2.7%, and Taiwan's TAIEX lost 1.8% after turning lower from an early gain.
Samsung Electronics and SK Hynix fell sharply in South Korea, while Japan's Tokyo Electron and Disco were among the semiconductor-related stocks under pressure. Recent corporate earnings have not fully eased concerns about artificial-intelligence investment valuations and financing conditions. Investors are still reassessing whether AI capital spending will generate sufficient returns. Because technology companies carry substantial weight in regional benchmarks, the sector's decline had an outsized effect on broader indexes.
Hong Kong equities also faced pressure as expectations for additional Chinese economic stimulus cooled. China's gross domestic product grew 4.5% year on year in the third quarter, ahead of the 4.4% market forecast, while growth for the first nine months reached 4.6%. After the data beat expectations, some investors judged that the need for large-scale additional support to meet the full-year growth target may have diminished. The Hang Seng Tech Index came under heavier pressure, with large technology companies including Alibaba and Tencent trading lower.
The weakness in regional equities coincided with broad yen gains, particularly weighing on the risk-sensitive Australian and New Zealand dollars. The market pullback was not driven by a single factor: uncertainty over AI investment returns, changing expectations for Chinese policy support and other macroeconomic forces all contributed. Brent crude remained above $110 a barrel, adding to uncertainty, but it was not the main explanation for the immediate currency moves.
RBA Rate Expectations Fail to Offset Yen Demand
The Australian dollar's decline was notable because RBA Deputy Governor Andrew Hauser had previously said that the inflation outlook had deteriorated materially. His comments led markets to raise expectations for a November rate hike. Overnight index swaps on October 21 put the implied probability of an RBA hike in November at 52.0%, up from 23.2% before Hauser's remarks.
Improved rate expectations nevertheless failed to prevent AUD/JPY from falling. As the yen strengthened alongside the Asian equity selloff, broader risk sentiment temporarily outweighed the Australian dollar's interest-rate support in the cross.
That does not mean expectations for tighter RBA policy have disappeared. It does show, however, how strongly currency crosses can be affected by shifts in overall market positioning. Australia's third-quarter consumer price index, due on October 28, will provide the next major policy signal.
AUD/JPY Breaks 110.37 Support
AUD/JPY was rejected in the 111.04-111.19 area. The zone includes the 38.2% retracement at 111.04 of the decline from 114.95 to 108.62, horizontal resistance at 111.13 and the daily 55-day exponential moving average near 111.19. After failing to sustain a break above that band, the cross fell through short-term support near 110.37, suggesting that the rebound from 108.62 may have ended at 111.30.
The move leaves the broader decline from 114.95 intact and makes the recent advance look more like a corrective rebound than a confirmed trend reversal. If AUD/JPY retests 108.62 and breaks below it decisively, the next reference area would be near 107.39, the 61.8% projection of the decline from 114.95 to 108.62 measured from 111.30.
A recovery above 111.30 would weaken the current downside view and could allow the rebound to continue. The next move will also depend on whether risk aversion across Asian markets persists.
USD/JPY Tests the 156.36 Level
USD/JPY's retreat has returned attention to support at 156.36. The pair had previously rebounded from 152.87 before meeting resistance near 159. As long as 156.36 holds on a sustained basis, the rebound from 152.87 remains technically intact, leaving USD/JPY less clearly weakened than AUD/JPY.
A decisive break below 156.36 would complete a double-top pattern formed around 159.02 and 158.94, suggesting that the rebound from 152.87 may have ended. It would also confirm rejection near the daily 55-day moving average, raising the prospect that the corrective decline from 163.97 could resume. A subsequent break below 152.87 would put the area near 152.16 in focus, based on the 61.8% projection of the move from 163.97 to 152.87.
A return above the 158.94-159.02 area would weaken the developing bearish structure and revive the possibility that the rebound from 152.87 could extend. Compared with AUD/JPY, which has already broken short-term support, USD/JPY remains at an earlier stage of a potential reversal.
For now, the yen is benefiting from the decline in Asian equities, but technical confirmation varies across the currency pairs. Australia's third-quarter inflation data on October 28 and the Bank of Japan's policy decision on October 30 will test whether the current yen-led, defensive market pattern can continue.