Japanese Stocks Slump 4.9%, Marking Worst Day Since March - Update

Japanese equities fell sharply, with the Nikkei Stock Average dropping 4.9% to close at 64,425.95 on Thursday—the biggest daily percentage decline since March. Semiconductor-related stocks led the selloff: Advantest plunged 15%, Lasertec, focused on R&D, fell 14%, and Kokusai Electric dropped 13%. The move came as markets across Asia declined alongside Wall Street, driven by fresh doubts about the sustainability of large, multi-year AI investments and by repricing of Federal Reserve rate-hike expectations after hotter-than-expected U.S. inflation for September. With the 10-year Treasury yield above 5%, investors shifted to valuing assets that fund long builds against later revenue less favorably. In the credit market, debt-funded AI infrastructure concerns intensified, including a 15% slide in U.S. data-center operator CoreWeave after its corporate bonds were sold off.