Tech Selloff Deepens as BoJ Says Its Inflation Target Is Met
Friday, 30 October 2026 — Technology shares fell for a second day as results from Amazon and Intel deepened doubts over the cost of the AI build-out.
Chart of the day
Japan's core and core-core inflation against the Bank of Japan's new Outlook Report forecasts for fiscal 2026 to 2028, with the Policy Board's range. Source: Japan Statistics Bureau (e-Stat), Bank of Japan, GGMA.
Our three themes for the day:
First, the Bank of Japan. It held its rate at 1.25% but said for the first time that underlying inflation has reached its 2% target, will nearly triple the pace of its ETF sales from January and raised its core inflation forecast for the coming fiscal year to 2.6% from 2.4%. STIR traders price in 20 basis points of tightening by December, and in our view the overnight data support that path: Tokyo's core inflation held above target at 2.6%, the jobless rate fell to 2.4%, and the jobs-to-applicants ratio rose to 1.19. The scaled-back fuel subsidies add to near-term inflation, and Governor Kazuo Ueda's press conference is the next test for the yen, which has firmed only slightly.
Second, the ECB. The Governing Council debated a hike on Thursday and held anyway, but Christine Lagarde's "the direction of travel is quite clear" leaves 17 December as the live meeting, and STIR traders price an 82% probability of a rate rise. The case for a pause after December is the bond market: average 10-year sovereign yields are up around 35 basis points since the September projections. According to Reuters' sources, staff estimates put the cost at 100 basis points of growth and 90 of inflation over 2027-28. Lagarde's exit after February adds a second variable, as the race between Pablo Hernandez de Cos and Klaas Knot could shape how readily the ECB leans against wider French spreads. Our view, as argued on LiveSquawk before the decision, is unchanged: one more hike in December, then a pause.
Third, the tech selloff. Amazon and Intel added to Alphabet's record drop, and the common thread is the cost of the AI build-out: Amazon's capital spending topped $77 billion in the quarter while its online sales grew 2%, and Intel blamed a PC slump caused by memory shortages for a weak outlook. Nasdaq 100 futures fell 2.0%, yet more than 400 S&P 500 members rose on Thursday as investors rotated into defensive sectors, so in our view this is a repricing of AI spending rather than a broad flight from equities. Treasuries are the main beneficiary, with ten-year yields down almost 40 basis points this month, and the $6.3 billion Binance hack added a second risk-off shock overnight.
In brief
The BoJ held rates but said for the first time that underlying inflation has reached its target, opening the door to a December hike.
Intel and Amazon fell after hours as a PC slump and the cost of AI weighed, deepening the tech selloff.
Treasuries extended their rally as investors sought havens, with yields heading for their first monthly fall since February.
ECB President Lagarde said the direction of travel is clear after a hold, and sources see a December hike followed by a pause.
Binance suspended withdrawals after what it estimates was crypto's biggest hack, and Bitcoin fell.
Oil rose on signs the US may resume strikes on Iran after next week's midterm elections.
Today's Macro Roadmap: German unemployment is due at 09:55 CET, German GDP is out at 10:00 CET, euro-area GDP follows at 11:00 CET, Canadian GDP and the US employment cost index arrive at 13:30 CET, German flash inflation is due at 14:00 CET, ECB chief economist Philip Lane speaks in San Francisco at 17:10 CET, and Exxon and Chevron report today.
The full briefing
Technology shares fell for a second day as results from Amazon and Intel deepened doubts over the cost of the AI build-out, and Nasdaq 100 futures fell 2.0% to 28,979 (BBG). Treasuries rose across the curve as investors sought havens, and the ten-year yield fell 2.2 basis points to 4.91% (BBG). The BoJ held its rate at 1.25% and said for the first time that underlying inflation has reached its 2% target, opening the door to a hike in December (BBG). Brent rose 1.3% to $116.43 a barrel on signs the US may resume strikes on Iran (BBG), and Binance suspended withdrawals after what it estimates was a $6.3 billion hack, crypto's biggest (BBG).
Stocks
Intel fell 23% in extended trading after forecasting fourth-quarter sales of $15 billion to $16 billion, against an analysts' average of $17 billion, and blaming a PC slump driven by memory shortages (BBG). Amazon fell about 7% after its third-quarter capital spending topped $77 billion while online sales grew just 2%, the slowest since early 2023 (BBG). Yesterday, Alphabet posted its biggest-ever drop, erasing more than $500 billion of market value, as search advertising grew at the slowest pace in five quarters (BBG) (Channelnewsasia). The businesses funding Big Tech's collective $750 billion of AI spending this year are slowing (BBG), and AI cloud stocks CoreWeave, Nebius and Iren lost 5.8% to 6.7% after hours (Reuters). S&P 500 futures fell 0.9% to 7,684, Euro Stoxx 50 futures 0.5% to 6,190 and Nikkei 225 futures 2.4% to 63,200, as Japanese stocks extended their losses after the BoJ decision (WSJ). The Kospi fell 4.7%, with SK Hynix down 8% and Samsung Electronics 4.5% (BBG), while Hang Seng futures rose 1.5% to 23,367 even as mainland investors sold a net HK$24 billion of Hong Kong shares in October (BBG). The MSCI Emerging Markets Index fell 1.7% to 1,573.
The BoJ
The bank held its rate in an 8-1 vote, with Hajime Takata dissenting in favour of a hike, and will nearly triple the pace of its ETF sales from January to about ¥860 billion a year (BBG). It raised its core inflation forecast for the fiscal year from April to 2.6% from 2.4%, and more than 80% of economists expect a hike in December (BBG). Tokyo's core inflation slowed to 2.6% in October from 2.7%, matching consensus but staying above the bank's target (Reuters). Finance Minister Satsuki Katayama said she expects the BoJ to keep communicating closely with the government (BBG), and Prime Minister Sanae Takaichi said Japan will scale back its fuel subsidies from December (BBG).
The ECB
President Christine Lagarde said the Governing Council debated a hike on Thursday before holding the deposit rate at 2.5% unanimously, and that "the direction of travel is quite clear for all of us" (ECB). Officials are prepared to raise rates by a quarter point in December if the inflation outlook does not improve, people familiar with the matter told Bloomberg (BBG), and three sources told Reuters that a hike on 17 December is likely to be followed by a pause (Reuters). This morning, Bank of France Governor Emmanuel Moulin told La Montagne that ECB policy is measured, with most prices stable and no spillover to salaries, and that it is not the ECB's job to solve France's fiscal problems (BBG). Lithuania's Gediminas Šimkus said holding rates does not mean there will be no more hikes (BBG). He does not see second-round effects yet, but said the likelihood of energy spilling over into other prices has risen, and that the ECB will have more information in December (BBG). Lagarde will step down after the February meeting, eight months before her term ends, to speak freely on matters beyond monetary policy (CNN). Pablo Hernandez de Cos and Klaas Knot lead the race to succeed her, and governments will probably aim to agree on a successor by year-end (BBG).
New Zealand
All 19 economists in a Bloomberg survey expect the RBNZ to raise its cash rate to 3% on 9 December after this week's surprise hold, and Monetary Policy Committee member Carl Hansen said he was "50-50" on a December hike (BBG).
What's priced for central banks?
Currently, short-term interest rate (STIR) traders price a 70% probability of a Fed rate rise in December and 18 basis points of tightening by then. For the ECB, they price an 82% probability of a rate rise in December, and for the BoJ 20 basis points of tightening by December. They price a 97% probability of a BoE rate rise in November, an 85% probability of an RBA rate rise in November and a 75% probability of an RBNZ rate rise in December.
Currencies
The Swiss franc was the biggest gainer against the dollar among Group-of-10 peers, firming 0.3% to 0.8223 per dollar, and the dollar index fell 0.2% to 101.83 (BBG). The yen firmed 0.1% to 157.58 per dollar after rising as much as 0.4% following the BoJ decision (BBG), and strategists said the inflation signal and the faster ETF sales support the currency (BBG). The euro edged up 0.1% to 1.1187 dollars, and sterling rose 0.1% to 1.3393 dollars. The Canadian dollar firmed 0.1% to 1.3974 per US dollar and is heading for its best month since April after the Bank of Canada's first hike in more than three years (BBG). The Korean won strengthened 0.5% to 1,334.90 per dollar.
Bonds
Treasuries extended their rally in Asia, and benchmark yields have dropped almost 40 basis points in October, heading for their first monthly decline since February (BBG). The ten-year yield fell 2.2 basis points to 4.91% and the two-year 3.1 basis points to 4.57%. Japan's ten-year yield fell 7.3 basis points to 2.77%, and Australian and New Zealand ten-year yields fell around five basis points (BBG). Investors told Bloomberg that Fed Chairman Kevin Warsh's plan for six rate decisions a year, with less forward guidance, could force larger swings in Treasuries, and 30-year yields have risen about 10 basis points relative to two-year yields since Wednesday (BBG).
Commodities
Brent rose 1.3% to $116.43 a barrel and WTI 1.4% to $103.38 after the Wall Street Journal reported that a top commander briefed President Donald Trump on military options against Iran (BBG). Brent has rallied 12% in October to a six-month high despite a revival in flows through the Strait of Hormuz (BBG). Saudi oil loadings in the Persian Gulf rose on Wednesday, with nine supertankers collecting cargoes, the most since the hostilities began (BBG). Ukraine has paused strikes on Russian oil refineries after pressure from Trump, a pause expected to last until after the US midterm elections (WSJ). Gold fell 0.8% to $3,990 an ounce, heading for a second monthly decline as higher oil and US inflation data supported bets on a Fed hike (Reuters). Copper fell 0.8% and is set for a slight loss in October after three months of gains (BBG).
Crypto
Binance suspended deposits and withdrawals after the hack and pledged to cover all losses, with about $3 billion frozen on-chain, and TRM Labs attributed the attack to North Korea (BBG). The previous record was the $1.5 billion stolen from Bybit in February 2025 (Nbcnews). Bitcoin fell below $77,000 for the first time in over a month (BBG) and was down 0.5% at $78,422, while Ether fell 0.9% to $2,237. Ballet Global founder Bobby Lee said the stolen Bitcoin is probably gone for good (BBG).
Geopolitics
Polls give Trump poor marks on the cost of living before Tuesday's midterm elections, with inflation outpacing wage gains for six straight months (BBG).
Corporate news
Nvidia is in talks to provide credit support for Nscale's compute deal with Anthropic, according to The Information (LS), and Microsoft sold $25 billion of debt (Reuters).
Research trade ideas
Julio Callegari at JPMorgan Asset Management said the yuan could appreciate at least 10% over the long run in real effective terms and that the firm favours yuan-denominated credit (BBG).
Data and the day ahead
Data and the day ahead: US growth accelerated to an annualised 3.4% in the third quarter from 2.2%, above the 3.2% consensus, and the PCE price index rose 3.6% y/y in September from 3.4%, as expected, with the core rate at 3.1% from 3.0% (BBG). Japan's jobless rate fell to 2.4% in September from 2.5%, below the 2.5% consensus, and the jobs-to-applicants ratio rose to 1.19 from 1.18. Industrial production rose 2.2% m/m after a 2.4% fall, above the 1.2% consensus, while retail sales fell 0.7% m/m against a consensus rise of 0.3%. Still to come: German unemployment is due at 09:55 CET, with consensus at 5.0k from 12.0k, and German GDP at 10:00 CET, with consensus at 0.1% q/q from 0.3%. Euro-area GDP follows at 11:00 CET, with consensus at 0.2% q/q from 0.6%, alongside the September unemployment rate. Canada's August GDP and the US employment cost index are out at 13:30 CET, and German flash inflation at 14:00 CET, with consensus at 3.0% y/y from 3.3% (see our preview here). Bank of Italy Governor Fabio Panetta speaks in Rome at 10:00 CET, and Richmond Fed President Tom Barkin appears on Sirius XM at 14:30 CET. San Francisco Fed President Mary Daly gives introductory remarks at 17:00 CET, ECB chief economist Philip Lane speaks in San Francisco at 17:10 CET, and St Louis Fed President Alberto Musalem gives a keynote at 17:30 CET. Exxon and Chevron report today (BBG).
Time Stamp: 30 October 2026, 07:06 CET
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Tags: BoJ October 2026, Tokyo CPI October 2026, ECB December rate hike, Lagarde successor, Intel earnings, Amazon capital spending, Binance hack, Treasury yields October