Andrea Innocenti Tokyo trading quickly turned negative at the start of the week, reflecting the tensions building in US markets. Japanese investors, traditionally sensitive to Wall Street movements, have been closely monitoring the recent turbulence in the artificial intelligence and semiconductor sectors.
The sell-off in AI and semiconductor- related stocks hit US indices the hardest, creating a domino effect that also reached the Tokyo Stock Exchange.
This phenomenon was fueled by concerns about overinvestment in high-growth technologies and the difficulties of raising financing in an environment of higher interest rates.
The impact of the US sell-off on AI and semiconductor stocks
In the United States, the pressure materialized in a sharp decline in technology stocks, pushing the Philadelphia Semiconductor Index (SOX) to record its eighth consecutive session in negative territory.
The ongoing downward trend has fueled fears of a possible saturation of the chip market, highlighting the vulnerability of a sector that had experienced explosive growth in recent years.
The Philadelphia Semiconductor Index (SOX)'s downward path
The SOX closed last session with a decrease that translated into eight days of continuous decline.
This continuity highlights a loss of confidence among investors, who fear that rising production costs and financing difficulties could erode the profitability of companies in the sector.
Tokyo Stock Exchange Reactions: Nikkei in Red
Japan's main index, the Nikkei, began the day down 0,90% , settling at 64.735,74 points , a loss of 588 points . The decline reflects the immediate transmission of US concerns to the local market, where traders reduced positions in high-growth stocks to limit risk exposure.
The yen strengthens moderately against the dollar and the euro.
In the currency market, the yen showed signs of strengthening against the dollar , trading at 157,70 yen per dollar, while holding steady against the euro at 177,10 . A stronger yen could penalize Japanese exporters by reducing foreign exchange earnings, but at the same time, it could mitigate the cost of imports, providing a brief respite for companies most dependent on imported goods.
Investors' eyes will remain on developments in the US, as any signs of stabilization could also positively influence Japanese futures.