The Nikkei 225 Index tumbled 5.96% on Friday to close at 57,435, its lowest level since April, extending its weekly loss to more than 9%. It was the index’s worst weekly performance since the Covid-driven market selloff in March 2020.
Technology stocks led the downturn after a sweeping Democratic victory in the US midterm elections heightened fears of tougher AI regulation and a potential slowdown in data center investment. Japanese AI-related shares, which are heavily exposed to the global AI infrastructure boom, suffered steep weekly declines: Kioxia Holdings sank 36.8%, Advantest dropped 19.6%, Taiyo Yuden fell 22%, Tokyo Electron slid 13.2%, and SoftBank Group lost 20.8%.
At the same time, data showed that nominal wages in Japan rose at their fastest pace in nearly three decades, reinforcing expectations that the Bank of Japan could deliver another interest rate hike in December.
