Japan stocks mostly soar on US midterms, while AI-related shares extend tumble
EWJ•Japan’s Topix rose 1.3% after a Democratic sweep in US midterm elections, while the Nikkei fell 0.5% as AI and chip shares extended losses. Real estate, retail and pharmaceutical stocks gained as investors shifted out of technology shares.
1. Stocks move in opposite directions
The Topix rose 1.3% and had earlier gained as much as 2.4%, while the tech-heavy Nikkei slid 0.5%. The rally followed declines in crude oil after the Democratic sweep weakened President Donald Trump’s position and raised hopes for an end to the Iran war.
2. Technology shares extend losses
Advantest fell 10.3% and Tokyo Electron dropped 8.6%. Nomura Securities equities strategist Wataru Akiyama said funds had shifted from AI and semiconductors to other sectors, with growing concern that Democratic gains could delay data-centre plans and slow earnings growth. He added that competition between the US and China made a reversal in data-centre construction unlikely.
3. Retail and real estate gain
Twenty-five of the Tokyo Stock Exchange’s 33 industry groupings rose. Real estate gained 6.5%, retail rose 5.4% and pharmaceuticals advanced 5.3%; Fast Retailing climbed 7.9%. Toyota rose 5.3% ahead of its earnings report, while Sony and Nintendo gained 6.6% and 4.6%, respectively, before reporting after Thursday’s close. Shipping was the weakest sector amid prospects for lower freight rates if the Middle East conflict eases.
