Nikkei 225 Plummets as Tech Selloff Hits Japanese Stocks

The Nikkei 225 Index ended a five-session winning streak on August 19, 2026, experiencing a sharp decline that accelerated throughout the trading day. The index initially fell 0.41 percent to 68,939.54, but losses deepened to 2.31 percent, closing at 65,899.30. This downturn followed negative cues from Wall Street, specifically heavy selling of AI-related chipmakers and technology stocks.

Sector performance shifted dramatically during the session. While financial stocks like Sumitomo Mitsui Financial and Mitsubishi UFJ Financial initially posted gains of over 1 percent, they later tumbled by more than 3 percent as the selloff widened. SoftBank Group saw a volatile day, surging nearly 5 percent in early trading before tumbling almost 7 percent. Semiconductor and AI supply chain companies faced the steepest losses, with Kioxia falling 12.6 percent, JEF United Chiba dropping 13.7 percent, and Fujikura declining 9.7 percent.

Broader economic pressures contributed to the slide, including rising crude oil prices due to Middle East conflict concerns and Japan's 10-year government bond yield hitting a 30-year high. Automakers Toyota and Honda also saw declines of approximately 3 percent and 2 percent, respectively. In contrast to the equity market, the Cabinet Office of Japan reported a positive economic indicator, noting that core machinery orders rose by a seasonally adjusted 9.7 percent in June to 1,055.8 billion yen.