Japan’s Nikkei 225 Stock Average slumped Friday, putting the tech-heavy gauge on course to enter a technical bear market as investors unwind artificial intelligence-related trades.
The Nikkei fell as much as 7.1% to 56745.81, breaking under the closely watched 60,000 level and putting it 20% below the peak reached in June. The broader Topix index declined as much as 6.4%, the most since April 2025. Cable maker Furukawa Electric Co. and semiconductor company Rohm Co. slid more than 10%.
The weakness in Tokyo followed a post-election drop on Wall Street, where falls in chipmakers snowballed as investors bailed from technology shares on speculation that Democrats will clamp down on the artificial intelligence industry. Moves in Japan were also mirrored in South Korea and Taiwan, which saw sharp selloffs.
“Today’s market has the appearance of ‘panic selling,’” said Jumpei Tanaka, head of investment strategy at Pictet Asset Management Japan. “We are at the ‘brink’ of whether the AI rally is heading toward its end or is merely a temporary pause.”
Markets across the region saw selling in tech stocks with those such as Taiwan’s Taiex on course to also enter a technical bear market, down 20% from its peak levels. South Korea’s Kospi, which includes names such as Samsung Electronics Co. and SK Hynix Inc. has plunged as much as 8.8%.