Frederick Neumann, HSBC’s chief Asia economist, has identified troubling similarities between the current macroeconomic environment and the conditions that preceded the 1997 Asian financial crisis. The three concerning factors are the rapid rise in US Treasury yields to approximately 4.79%, persistent yen weakness, and investor euphoria around artificial intelligence. The 10-year Treasury yield has increased by roughly 80 basis points since February 2026, a move comparable to the mid-1990s rate surge. However, Neumann notes that Asian economies are now far better positioned, being net capital exporters with current account surpluses and substantial foreign exchange reserves. The identified real threat is a potential decline in US demand for AI hardware, which could severely impact semiconductor exporters in South Korea, Japan, and Singapore.
Source: Read the original article
