Japan?s Nikkei falls as technology stocks face renewed selling pressure

Japan?s Nikkei 225 Index fell 2.12% to close at 63,290 on Friday, ending a three-day winning streak. The decline was mainly driven by heavy selling in technology stocks, as disappointing earnings and weak outlooks from major global companies raised concerns about the sustainability of the artificial intelligence (AI) boom.

Investor sentiment weakened further after Amazon shares dropped around 7% in after-hours trading following a sharp increase in planned capital spending. Intel shares also plunged 23% after the company issued a weaker-than-expected quarterly outlook and pointed to slowing demand in the personal computer market.

In Japan, investors awaited earnings reports from Kioxia Holdings and Tokyo Electron for fresh clues about demand linked to AI and semiconductors. Ahead of the results, Kioxia shares fell 7.1%, while Tokyo Electron declined 5.2%. Other major technology stocks also came under pressure, with Advantest losing 5.9%, SoftBank Group falling 6% and Lasertec dropping 8.8%.

Meanwhile, the Bank of Japan kept its policy interest rate unchanged at 1.25%. However, the central bank indicated that underlying inflation had finally reached its 2% target, raising expectations that it could consider an interest rate hike as early as December.

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