Nikkei 225 falls 2.65% on tech and AI doubts

SoftBank Group, Tokyo Electron and Advantest were among the biggest drags as traders reassessed the payoff from AI-related capital expenditure and data-center buildouts. The pressure came despite solid results from some major U.S. companies, underscoring that strong earnings alone are not enough to calm a market focused on valuation risk and the cost of funding growth.

Brent crude’s move above $110 a barrel added to the unease by reviving inflation concerns tied to persistent geopolitical tensions, while elevated U.S. Treasury yields further reduced appetite for risk assets. That combination is especially damaging for high-multiple tech shares, which depend on lower discount rates and sustained growth expectations.

From a technical perspective, the Nikkei’s drop extends a sharp reversal from recent highs and leaves the index well below its 50-day moving average, while the relative strength index points to a deeply oversold market. Investors will now watch whether buying returns in chip stocks or whether the combination of AI skepticism, inflation pressure and higher yields triggers a broader reset in Tokyo equities.