Japan's Nikkei 225 Plunged 5% as Global Ai Trade Unwinds

Akira Ito
17 Jul, 2026
Tokyo

Japan's benchmark indexes turned sharply lower and extended weekly losses amid deepening global sell-off in AI-related stocks. 

The Nikkei 225 Stock Average fell nearly 5%, the broader TOPIX fell more than 3%, and the yen weakened to 162.41 against the U.S. dollar. 

The yield on 10-year Japanese government bonds inched higher for the second consecutive session and increased to 2.73% amid imported-energy-driven inflation. 

The price of Brent crude oil rose 1% to $85.09 a barrel amid escalating military exchanges between the U.S. and Iran, raising fears of a prolonged shutdown of commercial shipping through the Strait of Hormuz. 

Japan's leading semiconductor equipment and electronic component makers extended weekly losses in Friday's trading as investors soured on the prospects of an AI-driven rally. 

For the week, Kioxia Holdings plunged 31%, Tokyo Electron declined 11%, Advantest Corp. fell 10%, SoftBank Group declined 17%, and Lasertec Corp. decreased 9%. 

The Japanese yen wobbled around the 162 level amid growing realization that the fiscal policy expansion and the Bank of Japan's reluctance to lift rates amid increasing inflationary pressures driven by the five-monthlong conflict in the Middle East.  

Many currency traders are preparing the yen to test the 170 mark against the U.S. dollar, as the Bank of Japan shows no urgency to revise rates higher, Japanese corporations continue to park their overseas earnings in foreign nations, and the Japanese government pursues expansionary fiscal policy.  

 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average decreased 5.8% to 62,939.59, and the broader TOPIX dropped 4.1% to 3,866.99. 

For the week, the Nikkei 225 Stock Average plunged 8.7%, and the TOPIX dropped 5.0%, driven by sharp losses in semiconductor-related stocks. 

SoftBank Group plunged 12.4% to ¥5,221.0, Tokyo Electron decreased 10.5% to ¥63,450.0, Advantest Corp. declined 12.9% to ¥26,095.0, and Kioxia Holdings dropped 16.1% to ¥52,110.0. 

Nippon Yusen KK gained 2.6% to ¥5,684.0, Mitsui OSK Lines edged up 0.9% to ¥5,571.0, and Kawasaki Kisen Kaisha Ltd. increased 2.3% to ¥2,704.0.