Key Takeaways
- Japan's Nikkei share gauge fell over 4% amid a global selloff in chipmakers.
- Geopolitical tensions, particularly with Iran, exacerbated investor concerns.
- Tech and AI-related shares were the biggest losers on the day.
Tokyo saw its benchmark Nikkei 225 index tumble by more than 4% to close at 63,896.48, marking one of its steepest declines in four months. This significant drop came as a result of a broader global sell-off affecting the technology sector and heightened geopolitical tensions, particularly with Iran.
The decline was further exacerbated by overnight losses in US equities, where tech stocks experienced a sharp downturn. Hawkish remarks from Federal Reserve officials also reinforced expectations for continued interest rate hikes, adding to investor caution.
In Japan, the broader Topix index slipped 2.61% to 3,923.45. The Philadelphia Semiconductor index, which tracks US-based semiconductor companies, fell by 4.3%, reflecting a significant impact on the global tech market. South Korean chipmaker SK Hynix saw its shares plunge over 13% in US listings.
With South Korea’s market closed for a holiday, selling pressure intensified on Japan's tech sector, particularly affecting companies like Kioxia Holdings, which experienced its steepest one-day decline since November 2025. Kioxia lost 16.05%, followed closely by Taiyo Yuden and Sumco.
Geopolitical tensions remained high, with US President Donald Trump threatening a broader escalation in strikes on Iran. This added to the already fragile sentiment among investors, who are wary of sustained memory chip price increases amid AI and data centre trends.
Despite the overall negative market performance, some sectors showed resilience. Seven & I Holdings saw its shares rise 4.38% after announcing talks with Polish convenience store operator Zabka Group for a potential stake acquisition.
