Japan’s Nikkei Stock Plunges by Most in Seven Months on Tech Selloff (UPDATE 1)

Reuters

16:40 JST, November 18, 2025 (updated at 16:35 JST)

TOKYO, Nov 18 (Reuters) – Japan’s Nikkei share average sank by the most in more than seven months on Tuesday, as investors sold off tech stocks following Wall Street’s sharp decline overnight.

The index .N225 dropped 3.2% to close at 48,702.98, posting its sharpest daily decline since April 9. The broader Topix .TOPX sank 2.9%.

Since fiscal dove Sanae Takaichi’s election as the prime minister last month, expectations for expanded economic stimulus have driven sharp gains in Japanese shares, with the Nikkei touching an intraday record of 52,636.87 on November 4.

“Once the Nikkei fell below the key 50,000 level, sentiment worsened and the sell-off accelerated,” said Seiichi Suzuki, chief equity market analyst at Tokai Tokyo Intelligence Laboratory.

“Some investors wanted to buy shares on a dip, but even they waited for shares to fall further.”

U.S. stocks ended sharply lower on Monday, with the S&P 500 and the Nasdaq closing below a key technical indicator for the first time since late April as investors braced for quarterly results from retailers and Nvidia NVDA.O and awaited a long-delayed U.S. jobs report this week. .N

Nvidia, the world’s largest company by market value and which is at the heart of Wall Street’s artificial intelligence trade, is due to report after the bell on Wednesday.

SoftBank Group 9984.T fell 7.5%, while chip-related Tokyo Electron 8035.T and Advantest 6857.T lost 5.5% and 3.7%, respectively.

“Positive factors that had driven the market rally have weakened, such as AI growth and expectations for U.S. rate cuts,” said Naoki Fujiwara, a senior fund manager at Shinkin Asset Management. “The worsening relationship between Japan and China is also weighing on sentiment.”

Fiber optic cable makers, beneficiaries of AI trade, fell, with Fujikura 5803.T and Sumitomo Electric Industries 5802.T losing 9.9% and 9.1%, respectively.