FX.co ★ Japanese Shares Follow Wall Street Lower

The Nikkei 225 Index dropped by 2.4%, falling below 48,700, while the Topix Index decreased by 0.5% to close at 3,282 on Friday. This decline reversed the gains seen in the previous session, mirroring a sell-off on Wall Street the night before. U.S. stock markets suffered losses due to ongoing concerns about the potential formation of an AI bubble, coupled with stronger-than-anticipated U.S. employment figures which have heightened expectations that the Federal Reserve will refrain from reducing interest rates in December. In Japan, technology and AI-related stocks led the downturn. Companies such as SoftBank Group, Advantest, Kioxia Holdings, Fujikura, and Lasertec saw declines ranging from 3.8% to 14%. Additionally, investors repositioned themselves in anticipation of an expected economic stimulus package from Prime Minister Sanae Takaichi’s administration, pressure that has impacted the yen and domestic bonds. On the economic data front, Japan recorded a three-month high in October's core inflation, with exports surpassing forecasts.