Nikkei Crashes 6% Into Bear Market as SoftBank, Advantest Lead AI Chip Rout in Japan's Worst Day Since 2025

TOKYO — Japan's Nikkei 225 stock index plunged nearly 6% on Friday and entered a bear market, as a global selloff in artificial intelligence stocks battered Tokyo's chip and technology heavyweights.

The Nikkei fell 3,643.13 points, or 5.96%, to 57,434.77. The index closed more than 20% below its June peak, entering bear-market territory.

The decline was historic in scale. Bloomberg reported Japan's benchmark dropped the most in more than a year, on concern the U.S. will tighten regulation of the AI industry after Democrats' decisive election win.

Below 60,000

The Nikkei fell as much as 7.1% to 56,745.81 during the session, breaking under the closely watched 60,000 level. The broader Topix index declined as much as 6.5%, the most since April 2025.

The index's June 22 record peak was 72,831.73.

Chip stocks plunge

AI-linked stocks took the heaviest hits. Rohm tumbled about 20% in morning trading, Furukawa Electric lost more than 19%, Resonac fell roughly 15% and Kioxia dropped over 12%.

SoftBank Group, a major AI investor, was hit hard. It opened at 3,350 yen, about 15.8% below its previous close, on heavy sell orders.

Chip equipment makers also fell sharply. Advantest lost 12.2% and Tokyo Electron dropped 7.3%. Rohm, Advantest and Tokyo Electron supply power chips and the machinery used to make the processors that fill data centers.

Second straight day of losses

The rout deepened Thursday's decline. On Thursday, the Nikkei fell 1.8%, weighed by Advantest and Tokyo Electron, which plunged 14.7% and 9.4%, respectively.

Thursday's selling had been narrow. Of the Nikkei's 225 components, 161 rose that day while 64 fell, and the broader Topix gained 1.2%. Friday's selloff was far broader.

Valuation worries

Investors are reassessing the AI trade. They increasingly question whether massive investments in AI infrastructure will generate returns sufficient to justify elevated technology valuations.

The Nikkei had surged on AI enthusiasm earlier this year, making it particularly vulnerable to a reversal in sentiment. Investors will watch next week whether bargain hunters step in or whether the selloff extends further.