The Tokyo stock market experienced severe pressure during Tuesday's trading (28/7/2026). The benchmark Nikkei 225 stock index plunged sharply to touch its lowest level in two months due to a massive sell-off hitting the global technology sector.
According to official trading data, the Nikkei 225 index closed significantly weaker by 2,566.27 points, or plummeted 3.95 percent to the position of 62,364.92. At the start of the day's trading, the index actually opened at 64,539.92 and touched a daily high of 64,573.18 before eventually continuing to decline to a daily low of 61,923.60.
The slump in the Japanese stock market this time was triggered by a domino effect from Wall Street in the United States, specifically the fall of semiconductor chipmaker stocks. Global market players are starting to feel skeptical about the effectiveness of massive capital expenditures on artificial intelligence (AI) infrastructure by tech giants, as they are deemed unlikely to generate commensurate profit growth in the near term.
The price-weighted characteristic of the Nikkei index meant that sharp corrections in local chipmaker stocks directly weighed on the overall index performance. Kioxia Holdings shares led the decline, free-falling by 18.33 percent, followed by Sumco which plummeted 16.53 percent, and Lasertec which weakened by 14.05 percent.
This weakness also spread to the banking sector as investors remained cautious ahead of the central bank's monetary policy announcement. Major banking stocks such as Mitsubishi UFJ and Mizuho both weakened in the range of 3.2 percent to 4.9 percent. On the other hand, the weakening of the yen to around 163.73 per US dollar failed to become a positive catalyst for exporting companies as it was overshadowed by the heavy selling pressure in the market.
