Japanese Shares Drop on Tech Selloff

Japanese Shares Drop on Tech Selloff

The Nikkei 225 Index fell 2% to below 68,000 in post-holiday trading on Tuesday, extending its decline to a fourth consecutive session and following an overnight tech-led selloff on Wall Street.

Technology stocks faced heavy selling pressure as concerns over the AI trade intensified, with investors reassessing capital spending prospects amid rising borrowing costs.

Broadcom CEO Hock Tan said that the AI boom had attracted investors whose strategies resembled gambling, while billionaire Ray Dalio described AI as a “classic bubble” approaching a potential burst as interest rates rise and investors seek to convert wealth into cash.

Significant losses were recorded among technology and AI-related stocks, including Kioxia Holdings (-9.3%), Advantest (-5.3%), SoftBank Group (-7%), Taiyo Yuden (-5.6%) and Tokyo Electron (-4.5%).