AI and chip share losses drag Nikkei down 883 points
2026-07-02
US stock declines ripple through Tokyo
In Tokyo stock trading on the morning of the 2nd, the Nikkei Stock Average closed down 883 points from the previous day at 69,591. AI and chip shares fell on the US stock market the previous day, and selling spread to related Japanese stocks. Kioxia Holdings, Japan's top company by market capitalization, stood out on the downside, and some market participants are now seeing the Nikkei entering a short-term correction.
Selling集中 on Kioxia
Kioxia shares at one point fell as much as 14.8% to 75,000 yen, their lowest level since June 11. That left the stock about 30% below its all-time high of 112,700 yen on June 22. Tokyo Electron and Advantest also fell sharply, while selling hit Fujikura and Ibiden. At one point, the Nikkei's losses came close to 1,800 points.
Supply-demand and technicals weaken
On the US market on the 1st, semiconductor stocks fell across the board, and the Philadelphia Semiconductor Index, or SOX, dropped 6.2%. Concerns are mounting that AI investment by large cloud operators known as hyperscalers will slow in the future, and that profit growth at semiconductor names will not progress as much as expected. Reports that Meta Platforms was considering launching a business to provide AI computing resources to outside customers also heightened concerns about excessive AI investment.
On the 2nd, Kioxia shares fell sharply and clearly broke below the 25-day moving average, which had been viewed as support, at 85,147 yen as of the 1st. From June 29 through July 1, buying on dips had emerged as the stock approached that moving average and helped it recover, but selling pressure prevailed on this day. Tomoichiro Kubota, chief market analyst at Matsui Securities, said, 'It reflects growing investor expectations of further downside, and the stock is likely to enter a phase of probing for a bottom.'
Room to fall toward the 13-week line
Kioxia's daily chart had been forming a triangle consolidation pattern since late June, with the stock moving up and down within a fixed range. This is seen as a sign that a turning point in the market is near, and once the balance breaks, a new trend is likely to emerge. In the stock market, there is also a saying that one should 'follow the breakout from a consolidation,' and when a stock breaks down as it did this time, momentum selling tends to accelerate.
There are also supply-demand concerns. Kioxia's margin trading ratio stood at 27 times as of June 26, sharply up from 12 times the previous week. This shows that many investors had built up margin purchases on expectations of further gains, and in a falling market, profit-taking and loss-cutting selling tends to emerge easily. Kubota said the stock could fall to around 60,000 yen, which corresponds to its 13-week moving average.
On the 2nd, gains in late-moving stocks such as Toyota Motor provided support for Japanese shares, but if AI and chip stocks continue to fall, a correction in the heavily influenced Nikkei will be difficult to avoid. Masayuki Tushida, senior market analyst at Rakuten Securities Economic Research Institute, said, 'For AI and chip stocks to recover, it will be necessary to confirm through the April-June 2026 earnings season, which is about to begin, that related demand remains strong.'
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