The Nikkei Average in Tokyo briefly plunged more than ¥3,000. U.S. inflation concerns and turmoil in semiconductor-related stocks hit the market hard.
On 15 October, the Nikkei Average in the Tokyo stock market recorded a historic plunge, with its decline from the previous close briefly exceeding ¥3,000. As of 10 a.m., it stood at ¥65,146.61, down ¥2,597.68 from the previous day. It was a difficult session, with the index falling below the ¥65,000 level for the first time in two weeks.
The immediate trigger for the plunge was the outlook for U.S. prices and monetary policy. The September consumer price index released by the U.S. Department of Labor rose more than market expectations, heightening concerns that inflation would remain elevated. Expectations of an early rate hike by the Federal Reserve resurfaced, pushing up long-term interest rates.
Higher interest rates are a burden for AI-related companies that require substantial funding, prompting heavier selling of technology stocks in the New York market on 14 October. In addition, disappointment over ASML’s earnings announcement and financial concerns at AI-related startups came to light, sending semiconductor-related stocks sharply lower.
Selling also spread across the Tokyo market, particularly among semiconductor-related stocks, sending the broader market lower across the board. Market participants cautioned about the impact of rising long-term interest rates and said late-October interim earnings announcements would be the focus going forward. Attention will center on whether an assessment of companies’ underlying strength can bring stability to share-price movements.