# Japanese Shares Fall as Technology and AI Stocks Drag Down Nikkei 225

- URL: https://stocks.freetheai.org/news/japanese-shares-fall-as-technology-and-ai-stocks-drag-down-nikkei-225-642d81
- Published: 2026-10-13T00:42:52Z
- Category: markets; sentiment: bearish; impact: high
- Symbols: [MARKET:NI225](https://stocks.freetheai.org/symbols/MARKET-NI225)
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Japanese equity markets dropped on Tuesday following a holiday break, with the Nikkei 225 Index falling more than 2% to below 68,000. The decline marks the benchmark index's fourth straight losing session, driven by a broad selloff in technology shares that mirrored an overnight downturn on Wall Street.

Investor enthusiasm for artificial intelligence and technology companies faced pressure as higher borrowing costs prompted market participants to reconsider future capital expenditure plans. Prominent industry figures highlighted growing caution surrounding AI valuations. Broadcom CEO Hock Tan noted that the AI expansion had drawn speculative investors, while Ray Dalio warned that artificial intelligence exhibits characteristics of a classic bubble nearing a potential unwinding as interest rates climb.

Semiconductor and technology-related stocks led the losses in Tokyo trading. Kioxia Holdings plummeted 9.3%, SoftBank Group tumbled 7%, Taiyo Yuden dropped 5.6%, Advantest fell 5.3%, and Tokyo Electron lost 4.5%. Market participants will monitor how rising interest rates and shifting corporate investment plans affect technology sector earnings and valuation stability in upcoming sessions.

## Key points

- The Nikkei 225 Index fell over 2% to below 68,000, extending its losing streak to four consecutive sessions.
- Technology and AI-related stocks led the market downturn following an overnight drop on Wall Street.
- Rising borrowing costs prompted investors to reassess capital spending prospects for artificial intelligence companies.
- Major tech losses included Kioxia Holdings down 9.3%, SoftBank Group down 7%, and Taiyo Yuden down 5.6%.

## Questions and answers

### Why did the Nikkei 225 Index fall?

The Nikkei 225 fell over 2% due to a sharp selloff in technology and AI stocks, following overnight losses on Wall Street and growing concerns over AI capital spending amid higher borrowing costs.

### Which Japanese stocks experienced the largest losses?

Major tech and AI-related stocks suffered heavy declines, including Kioxia Holdings (-9.3%), SoftBank Group (-7%), Taiyo Yuden (-5.6%), Advantest (-5.3%), and Tokyo Electron (-4.5%).

### What concerns are driving the selloff in technology stocks?

Investors are reassessing corporate AI capital expenditure due to rising interest rates and borrowing costs, with prominent market figures warning about speculative behavior and elevated valuations in the AI sector.