Japan's Nikkei Plunges 3.2% in Largest Single-Day Drop Since April Amid Tech Sell-off

Nikkei Suffers Sharpest Decline in Over Seven Months

Tokyo's benchmark Nikkei 225 share average experienced its largest single-day decline in more than seven months on Tuesday, November 18, 2025. The index plummeted by 3.2%, closing at 48,702.98. This marked its sharpest percentage drop since April 9, reflecting a broad sell-off in technology stocks that mirrored a significant downturn on Wall Street.

The broader Topix index also saw a substantial fall, sinking by 2.9%.

Tech Sector Bears the Brunt of Sell-off

The decline was primarily driven by a widespread sell-off in technology shares, particularly those related to semiconductors and artificial intelligence. Several prominent Japanese tech companies recorded significant losses:

• SoftBank Group saw its shares fall by 7.5%.
• Chip-related firm Tokyo Electron dropped by 5.5%.
• Advantest, another key player in the semiconductor industry, lost 3.7%.

A basket of Japan's top AI-related stocks tracked by BNP Paribas also fell by 4.7% during Tuesday's session.

Wall Street's Influence and Broader Market Concerns

The downturn in the Japanese market followed a sharp decline on Wall Street on Monday, November 17, where U.S. stocks ended significantly lower. The S&P 500 and Nasdaq indices closed below a key technical indicator for the first time since late April, fueled by investor concerns over high valuations in technology stocks.

Nvidia, a global leader in chip manufacturing and a bellwether for the AI sector, was a major factor in the U.S. market's struggles, with its stock dropping by 1.4%, contributing to a loss of over 10% for the month. Investors were particularly cautious ahead of Nvidia's quarterly earnings report, due later in the week, which was seen as a test for valuations across the entire tech sector.

Beyond the tech sell-off, broader concerns also weighed on investor sentiment. Worries about Japan's fiscal health and a weakening yen contributed to the market's vulnerability. Additionally, diplomatic tensions between Japan and China, particularly regarding statements on Taiwan, led to a sell-off in tourism and retail-oriented equities, further impacting market confidence.