Japan's Nikkei logs worst week since 2020 as market rout deepens on AI worries
EWJ•The Nikkei fell 9.3% for the week, its worst weekly decline since March 2020, as AI-linked stocks slid amid concerns about US political changes and AI development.
1. Nikkei posts steep weekly loss
Japan's Nikkei fell 6% on Friday to 57,434.77, its biggest daily decline since April 2025. For the week, it lost 9.3%, while 222 of its 225 components declined; the broader Topix fell 5.9%, with all 33 industry sectors lower.
2. AI concerns weigh on stocks
Chipmakers and AI-linked stocks extended a selloff that began Wednesday after Democrats won control of the US Congress. Investors worried Congress could stall AI infrastructure expansion and that tighter financial conditions could constrain smaller firms' fundraising. SoftBank Group fell 10.8% and Advantest declined 5% on Friday.
3. Volatility and selectivity
Nomura Securities strategist Maki Sawada said concerns could resurface over delays in AI data-centre construction and development, as well as rising costs that could cast doubt on AI companies' profitability. Sawada said the market is likely to take a more selective, stock-by-stock approach to AI-related stocks.
