Nikkei 225 slides 2.65% on AI, chip sell-off

The Nikkei 225 suffered a steep decline on October 22, 2026, closing at 62,907.84 points after a fall of 1,713.40 points, or 2.65%, from the previous close of 64,621.24. The drop pushed the benchmark below 63,000 and marked its lowest closing level since July 30. The index opened at 64,539.36, briefly rose to 64,866.44, then lost ground through the session to finish at the day’s low.

Heavy selling in semiconductor and artificial intelligence-related shares was the main driver of the decline. A dedicated Nikkei semiconductor stock index fell 5.28%, reflecting broad weakness across chip and equipment makers. The downturn followed a gain of 545.82 points, or 0.85%, for the Nikkei 225 on October 21, with the latest move more than erasing that recovery.

Advantest (6857.T), Tokyo Electron (8035.T) and SoftBank Group (9984.T) were among the principal contributors to the Nikkei’s slide. Together, these three technology-heavy names accounted for an estimated 1,110 points, or about 65% of the index’s decline, underlining the influence of large AI and chip-related stocks on the price-weighted benchmark. Around midday, SoftBank (9984.T) had lost 5.6%, Tokyo Electron (8035.T) 5.9% and Advantest (6857.T) 5%.

Resonac Holdings was the single biggest loser on the day, tumbling 11.2%. In contrast, Trend Micro stood out as the top gainer, rising 8.7%. The sharp divergence within the technology complex highlighted investor repositioning across different parts of the sector as sentiment toward AI infrastructure spending weakened.

The October 22 close left the Nikkei 225 about 10.1% below its October 5, 2026 close of 69,946.86, placing the market firmly in correction territory by that measure. The index had seen alternating gains and losses in the days leading up to the drop, including moves of 1.39% higher on October 16, 0.62% lower on October 19, 1.30% lower on October 20 and 0.85% higher on October 21.

Intraday trading showed initial resilience before selling pressure intensified. Around midday, the Nikkei was down 1.6% at 63,595.58, but losses deepened into the afternoon as AI and semiconductor shares continued to slide. By the close, the benchmark had shed more than 1,700 points, underscoring the speed of the reversal from its early-October high.

Beyond equities, Japan’s latest trade and credit data outlined a mixed macro backdrop. Exports rose 16.7% year-on-year to 10.9723 trillion yen, extending a 13-month growth streak, while imports climbed 18.9% to 11.5088 trillion yen, lifted by higher energy costs and strong demand for semiconductor-related products.

In fixed income markets, the benchmark 10-year Japanese government bond yield stood around 2.89% on October 22, compared with about 2.88% a day earlier, remaining below levels above 3% seen earlier in the month but well above those of a year before. A Bank of Japan survey the same day indicated that corporate financing conditions remained relatively accommodative, with the diffusion index for corporate borrowing demand at plus 3 after rising from minus 1, suggesting firms continued to seek loans for capital investment and working capital despite higher borrowing costs.