Nikkei 225 Falls on AI Share Selloff

The Nikkei was last at 68,308.92, putting it on track for a modest weekly loss, while the broader Topix eased 0.24% to 4,081.62. Market breadth was close to even, with 112 stocks rising and 110 falling, underscoring that the pressure was concentrated in the most AI-sensitive names rather than across the entire market.

The trigger came after a Financial Times report said OpenAI’s revenue was below what the company had previously implied, prompting a selloff in AI-related equities in the U.S. overnight. That added to a more cautious tone already building around stretched valuations in the sector, where investors have been willing to pay for the promise of long-term earnings growth and infrastructure demand.

The retreat in Japanese equities also reflected broader macro concerns. Borrowing costs remained elevated in the euro zone as higher oil prices fed inflation and French fiscal worries lingered, while tension in global bond markets continued to sap sentiment. Higher yields tend to compress equity valuations, particularly for growth stocks whose cash flows sit further in the future.

For investors, the move is a reminder that the AI trade is not only a story about earnings growth, but also about valuation discipline and market liquidity. SoftBank’s sharp slide shows how quickly sentiment can unwind in Japan’s technology complex when the market questions whether AI spending will translate into near-term revenue at the pace implied by share prices.

Technically, the Nikkei’s recent advance had already left it vulnerable to consolidation. The index had been trading near the upper end of its recent range, and Friday’s pullback suggests traders are willing to take profits when the external backdrop turns less supportive.

The key question now is whether this is a short-lived reset or the start of a broader de-rating in AI-linked assets. If corporate results from major U.S. technology and semiconductor names continue to validate the spending boom, Japanese tech could recover quickly. If not, the Nikkei’s dependence on a narrow group of AI leaders may make it more exposed than the broader market to a deeper correction.