The Nikkei 225 Index Closes 5.78% Lower

The Nikkei 225 Index plunged 5.96% to close at 57,435 on Friday, sinking to its lowest levels since April and pushing weekly losses beyond 9%. This represented its worst weekly performance since the Covid-driven market selloff in March 2020. Technology stocks spearheaded the decline after a sweeping Democratic victory in the US midterm elections sparked concerns about stricter AI industry regulations and a potential slowdown in data center expansion. Japanese AI-related stocks recorded significant weekly losses due to their substantial exposure to the global AI infrastructure buildout, with Kioxia Holdings falling 36.8%, Advantest dropping 19.6%, Taiyo Yuden declining 22%, Tokyo Electron losing 13.2%, and SoftBank Group sliding 20.8%. Meanwhile, data revealed that nominal wages in Japan rose at their fastest pace in nearly three decades, strengthening expectations of another Bank of Japan interest rate hike in December.

The Nikkei 225 Index dropped 3528 points or 5.78 percent on Friday to close at 57550 points. Losses were led by Ajinomoto (-12.50%), Yamaha (-12.27%) and Sumitomo Dainippon (-12.12%).

Japan’s Nikkei 225 Index plunged nearly 6% to around 57,500 on Friday, reaching its lowest level since April as it followed overnight losses on Wall Street, where the tech-heavy Nasdaq Composite entered correction territory amid mounting pressure on artificial intelligence stocks. The selloff intensified after a sweeping Democratic victory in the US midterm elections raised concerns over tighter AI industry regulations and a possible slowdown in data center expansion. AI-related stocks in Japan recorded significant declines, including Kioxia Holdings (-13.1%), Advantest (-14.7%), Ibiden Co (-16.3%), Tokyo Electron (-9.4%) and SoftBank Group (-6.8%). Meanwhile, data showed that nominal wages in Japan increased at their fastest pace in nearly 30 years, reinforcing expectations of another Bank of Japan interest rate hike in December. For the week, the Nikkei is poised to fall approximately 9%, marking its steepest weekly decline since March.