Nikkei Slumps 3.1% on U.S. Election AI Fears
Japan's Nikkei average fell 3.1% as investors sold off AI-related stocks following Democratic gains in the United States midterm elections.
The Nikkei average slumped 3.1% to 61,127.9 on Wednesday, driven by a sharp sell-off in AI-related stocks. Investors reacted to midterm election results in the United States, where gains by the Democratic Party sparked concerns that stricter regulations on data-center projects and slower AI infrastructure spending could follow.
The broader Topix index fell 1.85% to 3,857.97. Memory chip maker Kioxia saw the steepest decline, dropping 10%, while fiber-optic cable manufacturers Fujikura and Furukawa Electric both fell over 8%. Technology investor SoftBank Group shares slipped roughly 7%, and chip-testing equipment makers Advantest and Tokyo Electron fell 6.4% and 5% respectively.
Market participants expressed caution regarding the potential for a Democratic sweep of the U.S. Congress. Investors fear such a result could negatively impact fiscal outlooks, defense spending, and regulations across banking, healthcare, and cryptocurrencies.
