Tokyo stock market drops sharply, Nikkei loses more than 4%
Quick Look
- The Nikkei lost more than 4% on the Tokyo Stock Exchange after warmer-than-expected US inflation data, which rekindled expectations of a Fed rate hike.
- Technology stocks led the losses, with Advantest down 11%, Tokyo Electron -6.5% and SoftBank Group almost -10%.
- Sales spread across Asia, with Seoul's Kospi losing 7.7% and Samsung down more than 9%.
AI-generated summary
Why It Matters
Asian markets opened lower after the publication of higher-than-expected US inflation data, which increased the chances of a new interest rate hike by the Federal Reserve.
Strongly declining session on the Tokyo Stock Exchange, where the Nikkei dropped by more than 4% with less than an hour left until the mid-day break. At the start of trading, the index lost 3.5% and the Topix 1.9%, following warmer-than-expected data on American inflation, which rekindled expectations of a Fed rate hike, penalizing the technology sector in particular. Leading the losses in Tokyo are stocks linked to artificial intelligence: from Advantest with -11%, to Tokyo Electron with -6.5%, and SoftBank Group - which marks a decline of almost 10%.
Sales spread across Asia: the Kospi, the main index of the Seoul Stock Exchange, dropped 7.7%, with Samsung down by over 9%, equal to approximately 90 billion euros of capitalization gone up in smoke.
What to Watch
AI outlook — possibilities, not facts
The Nikkei could continue to lose ground in the coming sessions if US inflation data remains high
Possible · Within days
Open Questions
- How long will downward pressures on technology markets persist?
- Will the Federal Reserve actually confirm a rate hike in its next meetings?
- What other sectors besides technology could be affected by expectations of tighter monetary policy?
