FX.co ★ Japanese Shares Follow Wall Street Lower

The Nikkei 225 Index fell 1.6% to around 61,900 on Friday, its lowest level in nearly three months, as it followed a tech-led selloff on Wall Street driven by growing doubts about the artificial intelligence trade. Semiconductor manufacturers, memory chip producers, and other AI-related stocks recorded steep declines, while investors rotated into perceived safe havens such as government bonds and the yen.

Sentiment was further pressured by escalating tensions in the Middle East, after reports that the US and Israel have prepared contingency plans for possible renewed strikes against Iran following next month’s midterm elections.

Major technology names led the downturn: Kioxia dropped 7.6%, Advantest lost 4.2%, SoftBank Group declined 7.5%, Tokyo Electron slid 6%, and Fujikura fell 6.8%. Financial and industrial stocks also weakened, while consumer-related shares were comparatively more resilient. For the week, the Nikkei has lost more than 5%.