The Nikkei has declined more than 14% since hitting a record high in mid-June
[TOKYO] Japan’s Nikkei share average fell nearly 4 per cent on Tuesday (Jul 28) to its lowest close in more than two months, as chip-related stocks followed their US peers lower ahead of big tech earnings.
The Nikkei lost 3.95 per cent to 62,364.92, its lowest close since May 21, while the broader Topix fell 2.52 per cent to 3,963.59.
“The Nikkei fell because AI-related stocks were heavily sold off, but this has nothing to do with the fundamentals of Japan’s economic outlook,” said Koji Toda, senior fund manager at Resona Asset Management.
“Once investors see a firm outlook of big technology firms in Japan and the United States later this week, they would buy back stocks.”
Overnight, Nvidia fell 4.9 per cent and the Philadelphia semiconductor index extended its recent selloff, falling 2.2 per cent. The index is down 21 per cent from its record-high close on June 22, but up 63 per cent in 2026.
South Korea’s benchmark KOSPI plunged more than 10 per cent on Tuesday.
The Nikkei’s moves have been heavily influenced by the tech-heavy Kospi and the US Philadelphia semiconductor index.
Memory chip maker Kioxia fell 18.33 per cent to a daily limit low of 44,550. Chip-related Advantest and Tokyo Electron dropped more than 10 per cent each.
The Nikkei has declined more than 14 per cent since hitting a record high in mid-June as concerns over global technology firms’ aggressive AI spending weighed on local chip-related shares.
Investors had been shifting money to value stocks, such as banks, which had been rising on prospects of an early Bank of Japan interest rate hike.
On Tuesday, bank shares fell, with Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group losing more than 3 per cent each.
Retailers rose, with Pan Pacific International Holdings and Seven & i Holdings both up more than 3 per cent. Game maker Nintendo climbed 3.07 per cent.
Of the more than 1,500 stocks trading on the Tokyo Stock Exchange’s prime market, 30 per cent rose, 67 per cent fell and 1 per cent traded flat. REUTERS
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