The Nikkei Average fell by more than ¥3,000 at one point as the US Democratic Party was reported to have scored a sweeping victory in the midterm elections. Concerns over AI regulation are weighing heavily on the market.
Following the results of the US midterm elections, the Nikkei Average in the Tokyo market fell by more than ¥3,000 at one point as the Democratic Party was reported to be gaining ground. The decline widened further in the afternoon, and the Nikkei Average fluctuated sharply. Market participants said they believe US policy developments will also affect Japan's equity market.
Concerns over whether AI regulation will be tightened accelerated selling in AI-related and semiconductor-related stocks. As the possibility grew that the Democratic Party could win majorities in both chambers of Congress, views spread that this could affect AI investment and data center construction plans. Selling consequently expanded across sectors.
Tsuboi Hirotake (坪井 裕豪), chief strategist at Daiwa Securities, said of the market impact, "A combination of a Republican president and a Democratic Congress is likely to maintain economic balance, making it easier for brakes to be applied to hard-line policies. It is a situation in which stable management can be expected and which is not unfavorable for stock prices." Some market participants are also calling for caution regarding the current outlook.