Japan's Nikkei 225 Nears Bear Market as Tech Stocks Tumble

Japan's Nikkei 225 fell 6.2% on Friday to 57,320.01 points, approaching bear market territory as a global selloff in AI and semiconductor stocks hit Japanese tech companies hard. The index is now over 20% below its June 22 record high of 72,831.73 points. The decline follows Thursday's 1.8% drop and was led by semiconductor-related stocks, with Advantest falling 9%, SoftBank Group losing 11%, and Kioxia Holdings dropping 10%. The selloff mirrors Wall Street losses, where the Philadelphia Semiconductor Index plunged over 12% on Thursday, its worst intraday drop since March 2020. Investors are increasingly questioning whether massive AI infrastructure investments can generate sufficient returns to justify high tech valuations. Concerns that US policy changes could slow data center expansion have added pressure, while profit-taking and institutional deleveraging have accelerated the downturn.