(fxcue news) - Asian stocks plunged on Thursday as a disappointing start of the mega-cap U.S. earnings season prompted investors to pull back on the artificial-intelligence frenzy. A surprise rate cut in China also offered a reality check regarding the challenges facing the world's second-largest economy. The U.S. dollar plummeted against the yen ahead of a Bank of Japan policy meeting next week where a rate hike may be on the table. Gold fell more than 1 percent on profit taking as investors awaited U.S. GDP and PCE price index data that could offer more cues on when the Federal Reserve will cut interest rates this year and by how much. Oil prices also declined on concerns over weak demand in China, the world's largest crude importer. China's Shanghai Composite index dipped 0.52 percent to 2,886.74 as economic concerns mounted and surprise interest rate cuts did little to improve sentiment. Hong Kong's Hang Seng index tumbled 1.77 percent to 17,004.97 as Chinese internet giants tracked losses in their U.S. peers. Japanese markets led regional losses as tech stocks lost ground and the yen rose to its strongest level against the dollar in 2-1/2 months on BOJ rate hike bets. The Nikkei average tumbled 3.28 percent to 37,869.51, hitting a three-month low and posting its biggest daily decline in three years. The broader Topix index settled 2.98 percent lower at 2,709.86. Technology investor SoftBank Group plunged 9.4 percent while chip-related stocks such as Advantest and Tokyo Electron gave up 5-6 percent. Renesas Electronics nosedived 13.6 percent after reporting a 29 percent decline in half-year profit. Nissan Motor plunged 7 percent after a profit warning. Seoul stocks lost ground due to selling in the tech sector and concerns over economic recovery after data showed South Korea's economy contracted in the second quarter. The Kospi average fell 1.74 percent to 2,710.65. Memory chip making giant and Nvidia supplier SK Hynix plummeted 8.9 percent despite posting its highest quarterly profit in six years on robust artificial intelligence demand. Australian markets fell sharply to hit a two-week low, dragged down by tech stocks. The benchmark S&P/ASX 200 dropped 1.29 percent to 7,861.20 while the broader All Ordinaries index finished down 1.36 percent at 8,094.30. Across the Tasman, New Zealand's benchmark S&P/NZX-50 index fell 1.08 percent to 12,396.27. U.S. stocks fell the most in more than 18 months overnight as disappointing earnings from Tesla and Alphabet fueled concerns the frenzy around artificial intelligence technology might be overblown. In economic news, data showed new home sales fell to a seven-month low in June. The tech-heavy Nasdaq Composite plummeted 3.6 percent to reach its lowest closing level in over a month, while the S&P 500 slumped 2.3 percent and the Dow tumbled 1.3 percent.