The Nikkei Average fell sharply this week for the first time in five weeks, while credit concerns over AI investment surfaced abruptly. A stronger-than-expected US CPI reading and a steep decline in the SOX index also weighed on the market, prompting selling to spread across semiconductor and AI-related stocks.
In this week's Tokyo market, the Nikkei Average fell ¥3,706 from the previous weekend to ¥65,324, declining for the first time in five weeks. Risk aversion intensified, and the index briefly fell below ¥64,000 on Thursday.
Against a backdrop of a sudden rise in credit concerns over AI investment in the United States, selling spread to AI- and semiconductor-related stocks, at times triggering a broad sell-off in semiconductor stocks in both Japan and the United States. The SOX Index fell more than 4%, with the decline also affecting the domestic market.
The market subsequently showed signs of a rebound, but downward pressure on semiconductor-related stocks remained, also affecting South Korean and Taiwanese stocks. Japanese stocks rebounded on buying-back activity in response to turmoil in overseas markets, although views that the market had exhausted its catalysts remained widespread.
Next week, the focus will be on the degree of caution toward AI-related investment and developments during the earnings announcement season. Attention will also be required on expectations for strong-performing non-AI stocks and the timing of key economic data releases.