FX.co ★ Japanese Shares Track Wall Street Lower

On Friday, the Nikkei 225 Index experienced a decline of 1.3%, settling around 50,220. Similarly, the broader Topix Index fell by 0.5% to reach 3,297. This downturn erased some of the gains achieved in the previous trading session, as Japanese markets followed a tech-driven selloff on Wall Street from the previous night. The selloff was fueled by renewed apprehensions over high AI valuations and indications of a cooling U.S. labor market. Major U.S. AI stocks saw significant declines, with Nvidia, AMD, Palantir, Microsoft, and Broadcom being among those affected. In Japan, the SoftBank Group dropped by 7.6% owing to its substantial involvement in AI investments. Other companies contributing to the decline included Advantest, which fell by 6.4%, Fujikura, which decreased by 3.1%, and Disco Corp, which was down by 4.3%. The industrial and consumer sectors also showed weakness, recording noteworthy losses from firms such as Mitsubishi Heavy Industries, which fell by 2.4%, IHI Corp, which was down by 4.1%, Ajinomoto, losing 2.5%, and Sanrio, which declined by 1.1%. Additionally, it was reported that Japan's household spending increased at a slower pace than anticipated in September. For the week, projections indicate that the Nikkei and Topix are likely to post losses of approximately 4% and 1%, respectively.