Japan?s Nikkei ends lower as tech selloff and Middle East tensions weigh on sentiment

Japan?s Nikkei 225 Index fell 0.34% to close at 62,693 on Friday after dropping as much as 2.3% during the session. The index recovered some losses as selling pressure in technology and artificial intelligence stocks eased.

Despite the late recovery, the benchmark fell 4% for the week, marking its second consecutive weekly decline. Investors shifted away from high-performing tech and AI shares towards safer assets, including government bonds.

Market sentiment was also affected by rising Middle East tensions following reports that the US and Israel had prepared plans for possible renewed strikes against Iran after next month?s midterm elections.

Several major stocks remained under pressure, with Taiyo Yuden falling 3.9%, Disco Corp declining 3.8%, Mitsubishi UFJ dropping 2.3%, Hitachi losing 4.4% and Nintendo slipping 1.8%.

Meanwhile, Japan?s inflation accelerated in September, moving above the Bank of Japan?s 2% target and strengthening expectations of another interest rate hike this year.

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