Nikkei Slides as Semiconductor Risk-Off Hits

Nvidia and ASML price action underscores the strain. Nvidia’s recent trading shows the shares were already stretched, with RSI readings reaching 81.8 before easing back toward 60, while ASML has also retreated from recent highs after a powerful run, leaving both names exposed to profit-taking and any sign that chip demand is peaking.

The selloff comes as geopolitical risk adds a second layer of pressure. Tensions in the Middle East typically push investors toward safety, and Adalytica’s FX safe-haven trading signals show a sharp one-day jump in demand, while S&P 500 trade signals still point to elevated greed even as awareness remains low, a mix that can amplify abrupt reversals when risk appetite fades.

For investors, the key question is whether the move is a healthy reset or the start of a deeper de-rating in semiconductors. If chip leaders keep losing momentum, Japan’s equity rally loses one of its most important engines and global tech multiples could come under pressure, especially after recent warnings about supply-chain fragility and uneven chip-sector earnings.

Traders will now watch whether Middle East developments deepen the risk-off tone and whether upcoming semiconductor results or guidance confirm demand is still strong enough to justify recent valuations.