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

Japan's Nikkei 225 plunged over 7% on Friday as a dramatic selloff in US technology stocks spread across Asia, forcing investors to reassess their outlook for artificial intelligence spending. The index briefly fell below 57,000 before recovering to 57,576.63 by midday in Tokyo, still down 5.7%. The broader Topix also fell sharply, continuing a decline that had already pushed the Nikkei down 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 concerns about stricter American regulation fueling debate over costly AI investments. Japanese chip-related firms led the losses, with Rohm falling about 20% and Furukawa Electric losing over 19%. The Nikkei stood roughly 21% below its June record high, exceeding the typical 20% bear market threshold during trading, while South Korea's Kospi briefly fell more than 8%.