The Nikkei 225 Index dropped 2.8% to below 65,000 on Friday, while the broader Topix Index fell 1.3% to 3,975, extending the previous session’s losses and tracking a sharp selloff in US semiconductor stocks. The decline reflected mounting investor doubts over whether the lofty valuations of AI‑linked chipmakers are still justified by the sector’s aggressive growth forecasts. Sentiment was further undermined by escalating tensions between the US and Iran, which drove oil prices higher and kept inflation and interest rate risks in focus. Technology and AI-related shares led the selloff in Japan, with Kioxia Holdings plunging 15%, Tokyo Electron slipping 4.5%, SoftBank Group down 6.3%, Advantest off 5.9%, and Murata Manufacturing losing 7.7%. Both the Nikkei 225 and Topix are now on course for weekly declines of nearly 6% and 2%, respectively.