Nikkei 225 Faces Tech Selloff Pressure After AI Rally The Nikkei 225 index experienced a decline on Friday as investors sold heavily in key sectors, marking a reversal from recent gains driven by artificial intelligence (AI) momentum. The tech sector, particularly semiconductor-related stocks, led the downturn, with Tokyo Electron dropping 6.61% and Advantest Corp. falling 4.99%. These declines reflected broader concerns about the technology supply chain and a shift in investor sentiment following a sharp rally in Japanese stocks. The Nikkei 225 fell 5.50% in the session, with declines in paper and pulp, transportation, and telecommunication stocks amplifying the downward pressure. The Nikkei Volatility Index also rose, signaling heightened uncertainty in the options market. Despite the selloff, the broader market showed resilience, with more rising stocks than declining ones on the Tokyo Stock Exchange. This indicated that the drop in the Nikkei 225 was primarily driven by large-cap stocks rather than a systemic weakness. Companies like Japan Steel Works, Trend Micro, and T&D Holdings performed strongly, with T&D Holdings hitting a 5-year high of 4,475. Analysts noted that lower oil prices could provide long-term benefits to Japan’s economy, though the index must reflect the strength of tech and export sectors to sustain gains. Technical analysis of the Nikkei 225 revealed a key support level at 63,700, which was tested on Friday. The index had previously dropped from resistance at 67,000 to this support level, forming an ascending channel pattern that has supported the index since April 2025. A break below 63,700 could push the index toward the stronger support zone at 60,000. The RSI indicator fell below the midline, suggesting short-term weakness before a potential rebound.#nikkei_225 #tokyo_electron #advantest_corp #japan_steel_works #trend_micro
