Japan's Nikkei slumps more than 5% as market rout deepens on AI worries

Japan’s Nikkei fell 5.3% to 57,858.61 by Friday’s midday break, as investors sold technology shares amid concerns about tighter regulation and weaker AI-related spending. Business Recorder reported that the index had dropped as much as 7.1% during the session, while the broader Topix was down 5.4%.

The decline followed steep overnight losses on Wall Street and extended a selloff in Japanese chipmakers and AI-linked shares that began on Wednesday. SoftBank Group lost 9.3% and Advantest fell 4.6%; 221 of the Nikkei’s 225 constituents were lower. The index was heading for an 8.6% weekly decline, its steepest since March last year, while volatility rose to its highest level since March 31.

Market commentary cited concerns over delays to AI data-centre projects, development spending and rising costs as factors that could renew volatility. The move also points to weaker sentiment across global technology shares, with the Nikkei’s broad decline affecting all 33 Topix industry groups.