Nikkei drops 2.64% as AI selloff and geopolitical risks weigh

what happened

According to Newsmetry API, Japan’s Nikkei 225 fell 2.64% to 67,206.79 on Tuesday, extending its decline to a fourth straight session. The broader Topix slipped 0.56% to 4,081.76. The market came under pressure after US semiconductor shares weakened, while the tech-heavy Nasdaq lost 0.44% overnight.

Investors also remained focused on the US Federal Reserve’s next policy decision and geopolitical risks in the Middle East and Ukraine. Tuesday’s data showed that Japan’s wholesale prices rose 6.8% year on year in September, while yen-based import prices increased 24.5%.

Maki Sawada, an equities strategist at Nomura Securities, said investors were increasingly questioning whether huge investments in AI hyperscalers would pay off. She also pointed to the impact of global flashpoints on energy prices. Marine transportation was the strongest Topix group, gaining 3.35%, while nonferrous metals fell 4.79%. Kioxia Holdings lost 13.02%, Taiyo Yuden dropped 9.34% and Kokusai Electric declined 9.19%.

why it matters

The move highlights pressure on technology shares alongside broader caution ahead of the Federal Reserve’s next decision. Japan’s rising wholesale and import prices add to the market’s macroeconomic uncertainty.

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