Japanese Share Fall as Tech Rout Persists

The Nikkei 225 Index dropped 1.3% to below 63,300 on Wednesday as markets reopened after a holiday, with technology stocks facing renewed selling pressure amid lingering concerns over the sustainability of the AI trade. Japanese equities also followed declines in US futures as early election polls pointed to a possible Democratic takeover of the House of Representatives and possibly the Senate. Investors are concerned that a potential Democratic sweep could result in stricter AI regulations and greater corporate oversight. Given the significant exposure of Japanese companies to the global AI expansion, the sector remains particularly sensitive to shifts in investor sentiment. Technology and AI-related stocks led the losses, with sharp losses from Kioxia Holdings (-6.7%), Advantest (-4.2%), Tokyo Electron (-3.3%), Lasertec (-3%)a nd Taiyo Yuden (-9.6%).