HSBC’s chief economist warns of parallels to 1997 Asian crisis

The last time rising US borrowing costs, a plummeting Japanese yen, and infectious tech optimism converged in Asia, the result was a financial crisis that toppled governments and wiped out decades of economic progress. HSBC’s chief Asia economist Frederick Neumann thinks the ingredients are lining up again. In a note dated August 31, Neumann drew pointed comparisons between the current macro environment and the conditions that preceded the 1997 Asian financial crisis. Three factors, in particular, caught his attention: sharply rising US Treasury yields, persistent yen weakness, and investor exuberance around a dominant technology narrative. In the 1990s, that narrative was the internet boom. Today, it’s artificial intelligence. The parallels are hard to ignore Start with yields. In the early-to-mid 1990s, US Treasury rates surged from roughly 5% in October 1993 to nearly 8% by November 1994, sending shockwaves through emerging markets that depended on dollar-denominated capital. The current trajectory looks uncomfortably familiar. The 10-year US Treasury yield has climbed to approximately 4.79%, an increase of about 80 basis points since February 2026 alone. The broader arc is even...