Solid Gold Berjangka – Japan’s Nikkei 225 index plunged 2.12% to close at 63,290 in Friday’s trading session (October 30), snapping a three-day winning streak. The pressure stemmed primarily from technology stocks, following earnings reports from several major companies that reignited concerns regarding the sustainability of investment trends in artificial intelligence (AI).
Sentiment in the tech sector soured after Amazon shares dropped approximately 7% in after-hours trading, following a sharp increase in the company’s capital expenditures. Meanwhile, Intel shares tumbled 23% after the company issued quarterly projections that fell short of expectations, signaling a slowdown in demand within the personal computer market.
In Japan, investors are also awaiting earnings reports from Kioxia Holdings and Tokyo Electron for a clearer picture of AI-related demand. Ahead of these reports, shares of Kioxia fell 7.1%, while Tokyo Electron slid 5.2%. Other notable decliners included Advantest, down 5.9%; SoftBank Group, which weakened by 6%; and Lasertec, which fell 8.8%.
This sell-off reflects growing investor skepticism regarding whether heavy AI spending will yield returns in the near term. Following a prolonged rally in tech stocks, disappointing earnings reports have prompted market participants to re-evaluate the valuations and growth prospects of companies with significant exposure to the AI sector.
Regarding monetary policy, the Bank of Japan maintained its interest rate at 1.25% but signaled that core inflation has reached its 2% target. This development opens the door for a potential rate hike in December—a prospect that could exert further pressure on the Japanese stock market should expectations for policy tightening intensify. (srh)