The Nikkei 225 continued to fall sharply on credit concerns over CoreWeave and caution over AI investment, with views that the short-term sell-off will continue. Ahead of the full-scale release of July–September earnings this week, the investment policy assumes increasing holdings of undervalued stocks over the long term.
Last week, the Nikkei 225 fell 4.0% to ¥62,693, weighed down by credit concerns over CoreWeave and fears of excessive investment in AI-related businesses. Although the market rebounded at times, the outlook for downside risk has become unclear following the sharp decline over the past two weeks.
Because of its high weighting in AI- and semiconductor-related stocks, the Nikkei 225 is susceptible to negative factors, at least temporarily. TOPIX was relatively firm, but it has fallen below its 26-week moving average, leaving the technical picture weak.
AI concerns are becoming linked to the expanding risk of information leaks and fears of higher interest rates, spreading expectations of a slowdown in AI investment. In particular, concerns about global vulnerabilities, including a PHP vulnerability, and debate over investment restraint by hyperscalers could spread, particularly among AI-related stocks.
Long-term interest rates could remain elevated amid higher crude oil prices related to US and Middle East conditions and persistent inflationary pressure, although some decline has also been observed. Ahead of the full-scale release of July–September earnings, the Bank of Japan's Tankan survey showed strong conditions for the large-company DI, and the impact of earnings announcements on the market is attracting attention.
The Japanese equity investment policy is to consider increasing holdings of undervalued stocks from the perspective of long-term asset formation, even as the short-term sell-off continues.