The Nikkei Average fell as much as ¥4,332 on 6 November in a sharp market sell-off. Multiple factors were cited as the backdrop, including concerns over excessive AI investment, rising interest rates and risks in the Middle East, while the importance of continuing regular investments over the long term was discussed.
The Nikkei Average fell sharply today, at one point losing ¥4,332, marking a decline large even by historical standards. The sell-off was attributed to a combination of factors, including the impact of the plunge in US stocks, concerns over excessive AI investment, the shock of rising interest rates and the prolonged situation in the Middle East.
Masayuki Kubota (窪田真之) and Yushi Uegami (上源悠詞) of the Rakuten Securities Economic Research Institute shared the view that, although the short-term decline could continue, fundamentals would support the market over the long term. Particular attention was drawn to the impact of cooling data center investment on semiconductor and data center-related stocks.
The decline in PER was also noted, with the forward PER for the TSE Prime Market falling to 14.7x. Many analysts believe corporate earnings remain solid, and that stock prices could move toward fair valuation over the long term. A cautious approach is expected to be warranted in the short term.
Advice for individual investors included continuing regular investments and maintaining a stance of not withdrawing from the market. Historical data show that the highest long-term returns have often been supported by investing even on turbulent market days, underscoring a strategy of spreading purchases over time.