Japan's Indexes Extended 3-Week Sell Off Amid Asia-Wide Weakness

Akira Ito
28 Jul, 2026
Tokyo

Japan's indexes turned sharply lower on Tuesday, as semiconductor and technology stocks faced renewed selling pressure.

The Nikkei 225 Stock Average fell 4%, the broader TOPIX decreased more than 2%, and the Japanese yen eased to 163.77 against the U.S. dollar. 

Semiconductor-related stocks came under heavy pressure, tracking losses in overnight trading in New York amid renewed concerns that circular AI finance arrangements could break down if hyperscalers slow the current level of capital spending.    

Five leading U.S. tech companies—Microsoft, Alphabet, Tesla, Meta, and Amazon—are likely to spend in 2026 more than $700 billion in equipment and technologies to build AI-powered data centers.  

The weakness in global semiconductor stocks extended for a third consecutive week, dragging down benchmark indexes in South Korea by 9% and in mainland China by more than 2%.  

Investors are increasingly questioning valuations of semiconductor- and AI-related stocks, as hyperscalers continue to postpone return on investment beyond 2027.

The Brent crude oil price decreased 0.7% to $87.28 a barrel after the U.S. and Iran paused military exchanges for the second consecutive day. 

However, tensions remained high in the Middle East as the Iran-backed Houthi rebels continued to target Saudi vessels passing through the Red Sea, destabilizing global crude oil shipments.   

 

Japan Indexes and Stock 

The Nikkei 225 Stock Average decreased 3.9% to 62,399.75, and the broader TOPIX index declined 2.2% to 3,975.14.

Semiconductor-related stocks led decliners in Tokyo on Tuesday and extended their selloff to the third consecutive week. 

Tokyo Electron plunged 10.8% to ¥56,000.0, Advantest Corp. dropped 10.5% to ¥25,395.0, and Softbank Group declined 4.7% to ¥5,079.0. 

The three leading financial services providers declined amid growing expectations of a rate hike later in the year. 

Sumitomo Mitsui Financial Group decreased 2.9% to ¥7,004.0, Mitsubishi UFJ Financial Group declined 2.8% to ¥3,691.0, and Mizuho Financial Group fell 4.7% to ¥8,228.0. 

Nippon Yusen KK decreased 0.6% to ¥6,037.0, Mitsui O.S.K. Lines declined 0.8% to ¥5,864.0, and Kawasaki Kisen Kaisha Ltd. eased 1% to ¥2,819.0.