Market Analysis: Asia’s Record Recovery, FX Interventions, and Tech Earnings Split

July 31, 2026 | Daily briefing on KOSPI’s historic rebound, FX interventions, tech earnings divergence, and Bitcoin’s decoupling.

Daily Summary

KOSPI surged 17% in its best day in history. Following a two-week chip sell-off, the South Korean stock market experienced a record recovery; Samsung and SK Hynix jumped over 23%, the Taiwanese market rose 7%, the Nikkei gained 5%, and the MSCI Asia index advanced 4.7%. Nevertheless, the KOSPI is closing July with a loss of nearly 25%, marking its worst month since the 1997 Asian financial crisis.

Japan and Korea executed a coordinated intervention. Both countries entered the market together on Thursday to strengthen their currencies against the dollar. This marked the latest move of the year for Tokyo and a rare step for Seoul. The yen briefly recovered from a 40-year low, but as the BOJ kept interest rates unchanged at 1%, it weakened back to 160.70 on Friday.

Earnings split the night; Wall Street rebounded sharply. Amazon jumped 10% on strong cloud revenue, while Apple fell 6% after issuing a lower revenue guidance due to chip bottlenecks. On Wednesday, Microsoft posted its best day since 2008, surging +15.5%. The Nasdaq jumped 2.8%, snapping a six-day losing streak, while AMD and Intel rose 13% and 11%, respectively.

Bitcoin did not join the recovery: It traded sideways around ~$64,300. Despite one of the sharpest equity rallies of the year, crypto remained almost motionless; after moving in tandem with chip stocks throughout July, Bitcoin weathered both last week’s $797 billion drawdown and the Korean crash, and is now sitting out the recovery as well. Even the theft of ~594 Bitcoins ($38 million) across 500 wallets due to a vulnerability in Coldcard hardware wallets failed to move the price.

Oil is falling, but closing the month with a 20% gain. Brent is at $88 and WTI at $82.09; increased flows through the Strait of Hormuz and the Red Sea are offsetting ongoing war tensions. Saudi Arabia is establishing a Red Sea–Bab el-Mandeb maritime defense coalition with 14 countries, including Djibouti, Egypt, Pakistan, Sudan, and Türkiye. According to Phillip Nova, high security risks continue to embed a geopolitical premium into prices by raising freight and insurance costs.

Today’s key events include Eurozone inflation and the US employment report.

Main Agenda

KOSPI Records Best Day in History (+17%), Yet Still Suffers Worst Month

The chip sell-off that rattled global markets for two weeks reversed course on Friday. South Korea’s KOSPI recorded one of the best days in its history, surging up to 17% intraday. This record recovery—following a sell-off that dragged the index down over 40% from its peak in three days—was led by investors scooping up battered chip stocks. Samsung and SK Hynix jumped more than 23%, TSMC gained 10%, and semiconductor manufacturers served as the primary growth engine for the broader Asian rally; Taiwan’s market gained 7%, the Nikkei rose 5%, and MSCI’s Asia-Pacific ex-Japan index surged 4.7%.

However, one reality remains that even this record-breaking day could not erase: KOSPI is closing July down nearly 25%, marking its largest monthly loss since the 1997 Asian financial crisis. In short, single-day enthusiasm only partially repaired the month’s damage. The source of the recovery was Wall Street: strong Wednesday evening earnings triggered the largest rally in US chip stocks in over a year, breaking Nasdaq’s six-day losing streak. The sell-off was less about fundamental deterioration and more about “froth reduction” and expectation adjustments; as historic profit figures continued to roll in, a floor was found and capital quickly returned. However, the magnitude of the volatility—a record decline and a record surge within the same week—highlights how tense the market remains around the AI theme and how stretched positioning has become.

Coordinated Japan-Korea Intervention and Unchanged BOJ Rate

A rare event unfolded in foreign exchange markets: Japan and Korea conducted a coordinated intervention on Thursday to bolster their currencies against the dollar. For Tokyo, this was another attempt to halt currency depreciation this year; for Seoul, it was an unusual move. The impact was significant, as USD/JPY fell approximately 2.4%—marking its largest single-day loss since January 2023—while the Korean won strengthened to a nine-month high.

Coordination sends a strong bullish signal for the yen and forces speculators to think twice; carrying a leveraged position when a 450–500 pip adverse movement occurs is painful. This is notable because speculators had accumulated a near two-year high net short position against the yen worth $11.65 billion.

However, the intervention’s impact proved short-lived. As expected, the BOJ kept short-term interest rates unchanged at 1% (following June’s hike), causing the yen to weaken back to 160.70 on Friday. The central bank noted that it will continue raising rates based on economic and price developments, adjusting the timing and pace after assessing developments in the Middle East. Nick Twidale of ATFX noted that the market will continue pushing USD/JPY higher, early signs of which were visible this morning; however, considering the capital deployed in the intervention, questions arise over whether the BOJ might back this up with fundamental policy shifts—namely, further rate hikes. Most analysts expect the BOJ to raise rates to 1.25% by year-end; the slow pace of tightening is viewed as the primary reason pushing the yen to a 40-year low.

Amazon Soars, Apple Falls: Earnings Marathon Ends in Divergence

The week’s debate over “spending vs. profitability” concluded with a distinct divergence during the final act of mega-tech earnings. Amazon rose nearly 10% on strong cloud revenue; momentum in AWS provided the market with the evidence it sought that capital expenditure is translating into returns. Apple moved in the opposite direction: despite beating revenue and profit estimates, it fell 6% after keeping its revenue growth guidance below analyst expectations due to chip supply bottlenecks.

This divergence completes the pattern observed throughout the week. On Wednesday, Microsoft surged 15.5%—its best day since 2008—on its fastest cloud growth in four years, while Meta fell 8% on weak revenue guidance. Amazon has now joined Microsoft’s camp, while Apple landed on the cautious side (albeit for different reasons). Companies delivering strong cloud growth and converting capex into revenue are rewarded; those offering weak guidance are penalized.

This divergence triggered a robust recovery on Wall Street. On Wednesday, the Nasdaq jumped 2.8%, snapping a six-day losing streak to log its best day since June 15; AMD gained 13%, Intel rose 11%, and a 3x leveraged semiconductor ETF surged 24.7%. However, Meta’s trajectory is noteworthy: the stock closed lower for the eleventh consecutive session, dropping to $539 and breaking below rectangle pattern support at $550 to generate a technical sell signal. Today, oil giants ExxonMobil and Chevron report earnings, which will reveal how second-quarter crude prices filtered down to net profit.

Bitcoin Diverges Again: Ignores Both the Rally and Wallet Exploit

Bitcoin’s most consistent behavior this week was its indifference to surrounding market movements. Price action remained flat around $64,300 on Friday; despite one of the sharpest equity rallies of the year and KOSPI’s record 17% surge, crypto barely moved. After tracking chip stocks higher and lower throughout July, Bitcoin is no longer participating in either direction: it held firm during last Thursday’s $797 billion mega-tech drawdown, observed mid-week Korean crashes from the sidelines, and is now watching the record recovery from the outside.

This serves as compelling evidence that the dominant correlation defining July has genuinely decoupled. Another intriguing element is its complete lack of reaction to negative news: a vulnerability in key generation for Coldcard hardware wallets led to the theft of 594 Bitcoins (roughly $38 million) across approximately 500 wallets on Thursday, yet price action remained completely unfazed.

Post-Fed movements reflected a classic example of price discovery: Bitcoin drifted upward on Wednesday as the dollar index and two-year yields dropped sharply; however, these moves lacked standalone momentum, representing unpositioned traders seeking better entry points following the Fed statement. A notable shift occurred on the positioning front: the extreme short-selling bias from early in the week was wiped out, high-leverage short positions were closed Wednesday, and traders turned long. The long-to-short liquidation ratio spiked again, with long liquidations below the current price reaching 84%. This aligns with the structural setup required for a sustainable pullback: major liquidation clusters at $58,000 and $56,000 remain primary targets for August. As today marks the monthly close, technical closing levels will be critical.

Macro Framework

Dollar Closes Month in Red as Warsh Effect Persists

The US dollar maintains its post-Fed weakness. The index floats around 100.12; following Warsh’s hesitant messaging on Wednesday, it fell 0.8%, heading toward a 1.3% weekly loss and a 1% monthly decline. The driver remains investors questioning whether the incoming Fed chair is truly committed to reining in inflation; a stance offering no forward guidance yet taking no action forces the dollar onto the defensive.

The euro trades near a six-week high at $1.1517, while sterling sits flat at $1.3460. The yen tells a different story: after a temporary bounce driven by coordinated intervention, it weakened back to 160.70 following the BOJ’s rate hold. Heavy data lies ahead for the Eurozone today: July inflation, German unemployment, French preliminary CPI, and Eurozone Q2 GDP growth will provide signals regarding a potential ECB hike in September. In the US, July employment reports are set for release today; following the Fed’s ambiguous stance, labor market data is critical along the path toward the September policy decision. The broader picture: Warsh’s “all talk, no action” stance has weakened the dollar short-term, but elevated bond yields keep this weakness contained; ultimate direction hinges on the August 12 CPI release.

Gold Closes Month in Positive Territory; Oil Giants Report Today

Precious metals are closing July with gains, buoyed by dollar weakness and persistent geopolitical risks. Gold hovers around $4,050; although rising post-Fed yields exert pressure, dollar softness throughout the month supported the metal. Silver sits near $57.50 and palladium around $1.255. The warning highlighted yesterday—that “if oil stays elevated through summer, gold could pull back to $3,900″—remains a valid risk factor.

In industrial metals, copper advanced to $6.40, propelled by strong Asian recoveries and semiconductor demand. In agriculture, wheat trades near $680 as technical corrections continue alongside the erosion of war premiums. Today is significant for energy equities: ExxonMobil and Chevron report Q2 earnings. Given that crude rallied nearly 20% over the quarter, robust earnings figures are expected; however, recent price retracements and rising flows could introduce a cautious tone regarding forward outlooks. Both energy majors hit record highs in recent weeks.

Crypto

Bitcoin at $64,300: Monthly Close and Coinbase Signals

Bitcoin briefly spiked to $65,300 during Asian trading before giving back those gains within an hour to settle into the $64,200–$64,300 range. This pullback forms a natural component of post-Fed position resets. Short-term dynamics remain driven by positioning: highly leveraged short positions from early in the week were cleared Wednesday as traders flipped long; most nearby short liquidations were taken out, leaving high-leverage clusters below $64,000.

The long-to-short liquidation ratio spiked again, with long liquidations below current prices reaching 84%—a setup required for a sustainable pullback under current analytical frameworks. As today is the monthly close, technical closing levels remain critical; a close below $64,200 strengthens downside pressure into August and presents buying opportunities at lower levels. The options layout has also shifted: the gamma profile—which flashed upside volatility warnings for days—has normalized. Positive gamma now sits on both sides of the current price, indicating that market maker hedging increases the likelihood of range-bound, sideways price action within a defined corridor.

Commodities Landscape

Oil Pulls Back but Closes July Up 20%

Crude slipped on Friday but is closing out a strong month: Brent fell 1.2% to $88, while WTI dropped 1.8% to $82.09; on a monthly basis, both benchmarks gained roughly 20%. A key development emerged from Saudi Arabia: the nation is leading a coalition to enhance defense cooperation across transit chokepoints in the Bab el-Mandeb, the Red Sea, and the Gulf of Aden. According to the Saudi Ministry of Defense, 14 countries—including Djibouti, Egypt, Pakistan, Sudan, and Türkiye—are backing this multinational maritime defense coalition. This represents an institutionalized response to the Houthi Red Sea blockade and could improve transit security over the medium term.

Equity Front

Six-Day Losing Streak Snapped: Nasdaq Up 2.8%, Global Recovery Strong

Wall Street broke its six-day losing streak convincingly on Thursday: the S&P 500 rose 1.7% to 7,438 points, while the Nasdaq Composite jumped 2.8% to 25,122 points, marking its best single-day performance since June 15. The rally was driven by earnings and a semiconductor rebound. Microsoft surged 15.5%—its best day since October 2008—trading at triple its average volume; AMD gained 13%, Intel rose 11%, and a 3x leveraged semiconductor ETF surged 24.7%.

This strong close carried over into Asia on Friday, driving KOSPI’s record 17% day and triggering a broad regional recovery; European futures are also up 0.4%–0.6% today. However, two warning signs exist within the broader picture. First is Meta: the stock closed lower for an eleventh straight session to reach $539, breaking $550 support and triggering a technical sell signal—the clearest example of punishment for companies failing to monetize capital expenditures. Second is Microsoft’s technical layout: despite its record daily surge, its medium-term trend is classified as weak, meaning a single-day jump does not erase structural softness.

Today brings the monthly close alongside a heavy agenda: earnings from ExxonMobil and Chevron, Eurozone inflation figures, and the US employment report. The week and month can be summarized as follows: fitting record drops and record surges into the same week highlights extreme positioning in the AI theme and illustrates how news-sensitive the market has become. True directional movement will depend on upcoming data next week and the CPI report on August 12.

Weekly Calendar

Date	Day	Event / Indicator
July 31	Friday (Today)	Eurozone July Inflation; German Unemployment; French Preliminary CPI; UK Nationwide House Prices — Monthly Close
July 31	Friday (Today)	Earnings: ExxonMobil, Chevron, AbbVie, NatWest, Puma — Oil majors’ Q2 results; US July Employment Report
Post-Fed	—	Warsh provided no timeline; USD weakened; September hike probability at 65%; August 12 CPI is the main turning point
Last Night	—	Amazon up ~10% in extended trading on strong cloud revenue; Apple down 6% as chip bottlenecks weigh on revenue guidance
FX	—	Japan and Korea conducted coordinated intervention yesterday; BOJ held rates at 1%, sending Yen back to 160.70
August 12	Wednesday	US July CPI — First data fully reflecting the oil shock; key to September policy decision
On the Front	—	Saudi Arabia forms 14-country Red Sea–Bab el-Mandeb maritime defense coalition; flows through Hormuz increase