Semiconductor-related stocks came under broad selling pressure in the Tokyo market on 4 November, sending the Nikkei down ¥893 to its lowest level since 30 July. Concerns over data center regulations spread after速報 reports indicated that the Democrats were leading in the US midterm elections. Kioxia briefly fell below ¥10,000.
Selling in semiconductor-related stocks intensified in the Tokyo market on 4 November. After opening around the previous day's closing level, the Nikkei fell sharply in the morning. The move was attributed in part to growing concerns over US regulations on data center construction after速報 reports indicated that the Democrats were leading in the US midterm elections. The index narrowed its losses in the afternoon but remained near its lowest level since 30 July.
As concerns spread over a moratorium on data center construction, demand for AI data centers continued to grow, while regulatory proposals and tax plans emerged. Reports also suggested that data center development could face restrictions in Texas, and declines in related stocks stood out among Nikkei constituents. Taiyo Yuden, Sumitomo Electric Industries and Furukawa Electric were among the stocks that fell sharply.
The Nikkei and AI- and semiconductor-related stocks also narrowed their losses at points in the afternoon. Investor concerns appeared to ease after reports that the Democrats had won a majority in the US Congress, although some said political and regulatory developments would continue to require close attention.
Kioxia Holdings briefly fell below the ¥10,000 threshold on 4 November. Its large margin-buying balance weighed on supply and demand, contributing to share-price volatility.
Overall, uncertainty surrounding US politics and concerns over regulation of AI data centers acted as sources of anxiety for the market. Although trading showed signs of settling toward the afternoon, the market was expected to remain volatile.