Japan's Nikkei 225 plunges 7% as US tech selloff hits AI stocks

Japan's Nikkei 225 plunged over 7% on Friday as a sharp selloff in US technology stocks spread across Asia, prompting investors to reassess artificial intelligence spending prospects. The index briefly fell below 57,000 before recovering to 57,576.63 by midday in Tokyo, down 5.7%. The broader Topix also fell sharply, extending a decline that had already dropped the Nikkei 1.79% on Thursday. The selling followed a 5.5% drop in the Nasdaq Composite and a 12.3% decline in US semiconductor stocks, with fears of stricter US regulation reviving debate over costly AI investments. Japanese chip-related firms led losses, with Rohm plunging about 20%, Furukawa Electric losing over 19%, and SoftBank Group down about 11%. The Nikkei was roughly 21% below its record intraday high from June 22, crossing the conventional bear market threshold of 20% during the session.