Japan's Nikkei plunges nearly 6% as technology stocks lead market selloff

Japan's Nikkei 225 plunged 5.96% to close at 57,435 on Friday, falling to its lowest level since April. The index lost more than 9% during the week, marking its worst weekly performance since the Covid-led market crash in March 2020.

Technology stocks led the sharp decline amid concerns that a sweeping Democratic victory in the US midterm elections could result in tighter regulations on the artificial intelligence (AI) industry and slow down data centre expansion. Japanese companies with significant exposure to global AI infrastructure spending witnessed heavy selling.

Among the major losers, Kioxia Holdings fell 36.8% for the week, followed by Advantest, which declined 19.6%. Taiyo Yuden dropped 22%, Tokyo Electron lost 13.2%, and SoftBank Group slipped 20.8%.

Meanwhile, data showed that nominal wages in Japan grew at their fastest pace in nearly three decades. This has strengthened market expectations of another interest rate hike by the Bank of Japan in December.

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