Asian equities dip as AI-driven corporate debt strains sovereign bond markets

Asian shares slipped modestly on Thursday, with Japan's one outlet down 0.9% and South Korea's market falling 0.6%, dragging the MSCI Asia-Pacific index outside Japan lower by 0.1%. The decline was amplified by strains in sovereign bond markets after reports that SpaceX, Broadcom and Oracle are pursuing tens of billions of dollars in debt to fund AI chip purchases. Broadcom is targeting $50 billion, SpaceX $30 billion in investment-grade bonds and $10 billion in loans, while Nvidia remains a key supplier.

Higher oil prices pushed Treasury yields toward 24-year highs, supporting the dollar and sending the euro toward 17-month lows as worries spread from France to Italy and Greece. Analysts warned that the reliance on credit to finance AI builds could expose global investors to heightened risk, especially as central banks consider further rate hikes. Meanwhile, Samsung Electronics projected a massive rise in third-quarter operating profit, highlighting potential upside for semiconductor earnings despite the broader market pressure.