Japanese Shares Rebound After AI-Driven Selloff

The Nikkei 225 jumped more than 2% to above 58,800 on Monday, recovering part of last week’s steep losses as investor sentiment improved, with financial and consumer-related stocks leading the gains. Major banking stocks advanced, including Mitsubishi UFJ (4.6%), Sumitomo Mitsui (4.2%) and Mizuho Financial (4.8%). Retailers and automakers also posted solid gains, with Fast Retailing rising 2.7%, Nintendo gaining 3.4% and Toyota Motor climbing 2.1%. Last week, the Nikkei plunged more than 9%, marking its largest weekly decline since the COVID-19-driven market rout in March 2020. The selloff followed a Democratic sweep in the US midterm elections, which fueled concerns over tighter AI industry regulations and a possible slowdown in data center expansion. Given their significant exposure to the global AI infrastructure boom, Japanese technology companies remain particularly vulnerable to renewed weakness in the sector.