Nikkei 225 Plunges Over 4% Amid Heavy Selling of Chipmaking Stocks

The Nikkei 225 index fell more than 4% on heavy selling of chipmaking stocks, with Tokyo Electron and Advantest leading the decline. The weak yen failed to provide support, as global investors cut AI exposure across several markets at once.

The sell-off started on Wall Street, where Nvidia, AMD, and Micron all fell overnight, extending the slide in the Philadelphia Semiconductor Index. In Tokyo, the early selling clustered in chip and metals names, then accelerated after lunch.

Three worries converged to trigger the sell-off: the return on AI spending, the quality of demand behind it, and competition from China's growing memory ambitions. The Nikkei 225 is a price-weighted index, amplifying the falls in high-priced stocks like Advantest and Tokyo Electron.

The Bank of Japan's two-day meeting runs July 30-31, with the Federal Reserve decision on July 30 being another key catalyst. Kioxia will report its first-quarter results on July 31, providing a clearer read on NAND pricing, shipments, and supply discipline.