AI Stocks Plunge; Nikkei Marks Sixth Consecutive Day of Losses

Japan's Nikkei 225 index tumbled more than 3% during Thursday's trading (Oct 15). This decline extended a losing streak to six consecutive sessions and pushed the index to a two-week low, following higher-than-expected U.S. inflation data that sparked concerns over interest rate hikes.

Pressure also stemmed from a sell-off in technology stocks on Wall Street during the previous session. Rising borrowing costs are feared to weigh on tech companies, particularly those investing heavily in artificial intelligence (AI) infrastructure development.

AI-related stocks led the decline in Japan. Kioxia Holdings slumped 9.1%, Lasertec fell 8.8%, SoftBank Group dropped 7.8%, Advantest lost 7.4%, and Taiyo Yuden fell 4.5%.

The banking sector also faced pressure; shares of Mitsubishi UFJ and Sumitomo Mitsui each fell 1.1%, while Mizuho Financial declined 1.8%. These drops occurred despite Japanese economic data showing a higher-than-expected rise in core machinery orders for August—a positive signal for business investment.

Looking ahead, the Nikkei's movement is expected to remain influenced by concerns regarding U.S. interest rates and global sentiment toward tech stocks. Should the sell-off on Wall Street persist and expectations for Federal Reserve rate hikes intensify, the Nikkei risks further declines, even as domestic investment indicators show signs of improvement.