Japan’s Nikkei 225 Index tumbled nearly 6% to around 57,500 on Friday, its lowest level since April, tracking sharp overnight losses on Wall Street. The tech-heavy Nasdaq Composite slid into correction territory as mounting pressure on artificial intelligence shares sparked a broad selloff.
The downturn intensified after a sweeping Democratic victory in the US midterm elections fueled concerns over stricter regulation of the AI industry and a potential slowdown in data center expansion. AI-linked stocks in Japan were hit particularly hard, with steep declines in Kioxia Holdings (-13.1%), Advantest (-14.7%), Ibiden Co (-16.3%), Tokyo Electron (-9.4%) and SoftBank Group (-6.8%).
Adding to market jitters, fresh data showed Japan’s nominal wages rising at their fastest pace in nearly 30 years, bolstering expectations that the Bank of Japan could deliver another interest rate hike in December.
For the week, the Nikkei is on track to lose about 9%, putting it on course for its sharpest weekly drop since March.