Nikkei 225 Rises as AI and Chip Shares Sell Off

The biggest support came from non-tech stocks, with shipping, pharmaceuticals, steel and other cyclical and defensive sectors drawing buying interest. Kyodo reported that investors rotated into overlooked names such as gaming and medical shares after months of concentrated buying in AI and semiconductor stocks.

That rotation mattered because the day’s leadership showed how narrow the market has become. AI and chip shares came under pressure, limiting the Nikkei’s upside even as broader sentiment improved on easing worries about the global outlook and a report that Saudi Arabia plans to expand crude shipments via Oman, which helped push West Texas Intermediate lower and reduced concern about Middle East supply disruption.

The yen-sensitive and interest-rate-sensitive parts of the market also struggled to sustain gains as traders waited for signals from the Bank of Japan, which opened its policy meeting on Wednesday. With the Fed still tightening and the BOJ under scrutiny, investors are facing a sharper test of whether Japan’s equity rally can broaden beyond the AI trade.

For investors, the key issue is whether money continues to leave richly valued chip names and move into lagging sectors, or whether another round of central-bank uncertainty brings those funds back to the sidelines. The next catalyst is the BOJ decision and any fresh guidance on the path of global rates.