Nikkei 225 plunges 7% as US tech selloff hits Tokyo

Japan's Nikkei 225 fell more than 7% on Friday as a sharp decline in US technology stocks spread across Asia, prompting investors to reassess artificial intelligence investment prospects. The index briefly dropped below 57,000 before recovering to 57,576.63 by midday in Tokyo, still down 5.7%. The selloff followed a 5.5% collapse in the Nasdaq Composite and a 12.3% decline in US semiconductor stocks. Japanese chip-related firms led losses, with Rohm falling about 20%, Furukawa Electric dropping over 19%, and SoftBank Group declining around 11%. Concerns over stricter US regulations have intensified debate about costly AI investments. The Nikkei traded about 21% below its June 22 record intraday high, crossing the conventional 20% bear market threshold. The decline was regional, with South Korea's Kospi briefly falling over 8% and triggering a trading halt. Investors sought relative safety in government bonds as crowded, leveraged positions were unwound simultaneously.