The Japanese stock market recorded a negative trend for three consecutive sessions after the benchmark Nikkei index closed down 2.11% to 66,819.05 on Wednesday (8/7/2026). This achievement also marked the index's lowest position in nearly four weeks, while the Topix index also corrected 1.37% to 4,006.43.
The slump in Tokyo was triggered by negative sentiment spreading from the US stock market, where the Nasdaq index experienced a sharp decline. Investor uncertainty over the sustainability of the artificial intelligence (AI) stock rally was the main driver of the global sell-off. In addition, Samsung Electronics' financial performance, which fell below market expectations, triggered a wave of profit-taking in the Asian semiconductor sector.
Market analysts assess that investor confidence in the AI sector is currently shaking. Daisuke Hashizume, a senior strategist at Daiwa Securities, stated that although Samsung provided solid projections, the market remains skeptical about the potential for consistent stock price growth in the future. This condition is worsened by sentiment in South Korea, where the KOSPI index is now in a 'bearish' zone after falling more than 20% from its record high.
The impact of this sentiment was clearly visible on Japanese tech stocks. Tokyo Electron slipped 3.05%, while Advantest recorded a deeper correction of 4.69%. The most significant decline was experienced by capacitor manufacturer Taiyo Yuden, which plunged 8%. Amid pressure on the tech sector, investors tended to start shifting to defensive and domestic demand-oriented stocks, as reflected by the 1.04% gain in telecommunications operator KDDI's stock.
Data from the Tokyo Stock Exchange showed challenging market conditions, with 61% of the total 1,500 traded stocks experiencing declines, while only 36% managed to post gains.
