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Nikkei 225 Drops Over 3% as Strong US Inflation Sparks Rate Concerns

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NI225¥64,686.64 −4.51%

Japan's Nikkei 225 Index fell 3.92% to 65,090 JPY on Thursday, extending its losing streak to six consecutive sessions and hitting a two-week low. The drop followed stronger-than-expected US inflation data, which heightened fears that borrowing costs will remain high for longer. Japanese equities were also pulled down by an overnight technology selloff on Wall Street.

Technology and artificial intelligence stocks in Japan led the market downturn over concerns that sustained higher interest rates could strain credit outlooks for capital-intensive AI investments. Kioxia Holdings fell 9.1%, Lasertec lost 8.8%, SoftBank Group dropped 7.8%, Advantest declined 7.4%, and Taiyo Yuden slipped 4.5%. Banking stocks also weakened, with Mizuho Financial down 1.8% while Mitsubishi UFJ and Sumitomo Mitsui each dropped 1.1%.

In contrast to the equity market decline, domestic economic data provided some positive momentum as Japan's core machinery orders, a key indicator of business capital spending, increased more than expected in August. Investors will be tracking future interest rate developments and central bank statements to see if corporate investment strength can help stabilize broader market sentiment.

Key points

  • Japan's Nikkei 225 Index fell 3.92% to 65,090 JPY on Thursday, extending its losing streak to six sessions.
  • Stronger-than-expected US inflation data renewed investor fears over prolonged high borrowing costs.
  • AI and technology stocks led the selloff, with Kioxia Holdings down 9.1% and Lasertec dropping 8.8%.
  • Japanese core machinery orders grew more than expected in August, reflecting capital spending strength.

Written by our AI from expert market sources across the web. It can contain mistakes: check the facts before acting on them. Write-ups powered by the free AI API at FreeTheAI.org

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Questions and answers

Why did the Nikkei 225 drop on Thursday?

The Nikkei 225 fell over 3% after stronger-than-expected US inflation data sparked fears of higher interest rates, triggering a selloff in technology and growth stocks.

Which Japanese stocks were hit hardest by the selloff?

Artificial intelligence and tech shares suffered the largest losses, led by Kioxia Holdings down 9.1%, Lasertec losing 8.8%, SoftBank Group sliding 7.8%, and Advantest dropping 7.4%.

What domestic economic data was released in Japan?

Japan reported that core machinery orders, a key gauge of private capital investment, increased more than expected in August.