FX.co ★ Japanese Shares Drop on Tech Losses

Japan’s Nikkei 225 Index fell 2.12% to close at 63,290 on Friday, snapping a three-day winning streak as underwhelming earnings from major technology firms deepened doubts about the durability of the AI-driven rally. In US after-hours trading, Amazon shares slid about 7% after the company reported a sharp increase in capital expenditures, while Intel plunged 23% on a weaker-than-expected quarterly outlook and signs of cooling PC demand.

Domestically, investors looked ahead to earnings from Kioxia Holdings and Tokyo Electron for further clarity on AI-related demand. Both stocks came under pressure ahead of the releases, with Kioxia down 7.1% and Tokyo Electron off 5.2%. Other heavyweight tech names were also hit hard, including Advantest (-5.9%), SoftBank Group (-6%), and Lasertec (-8.8%).

Meanwhile, the Bank of Japan left its policy rate unchanged at 1.25% but indicated that underlying inflation has finally reached its 2% target, a shift that could open the door to a potential rate hike in December.