Japan's Nikkei slumps 3% as tech stocks tumble on AI worries

Japan’s Nikkei fell 2.8% by 2003 GMT on Friday after reaching an intraday decline of 3%, as chip-related shares led losses amid doubts about the returns from heavy AI spending. Business Recorder reported that the index followed overnight weakness on Wall Street, where Amazon and Intel fell after earnings highlighted substantial cash outflows.

Advantest dropped 9.1% and Tokyo Electron lost 5.6%, while Ibiden and Lasertec slid 15.2% and 13.8%, respectively. The broader Topix declined 1.3%; despite the day’s losses, the Nikkei remained 0.2% higher for the week, with investors also awaiting the Bank of Japan’s policy decision. Lower crude prices, supported by hopes for Middle East peace talks, provided some support to Japanese equities.