SoftBank Falls, Japanese Stocks Shake on AI War
Japanese stocks reversed their downward trend after rising around 0.7% earlier in the session. The Topix index fell 0.3% to 3,287.68 at 2:54 p.m. Tokyo time, while the Nikkei index was flat at 48,618.02. The previous gains, supported by hopes for a Fed rate cut and a rebound in US technology stocks, were not sustained.
The biggest pressure came from SoftBank Group, which plunged nearly 10%. Investors are concerned that competition in the AI sector is intensifying after Google launched a more powerful AI model and rumors emerged that Alphabet would offer AI chips to Meta. This sentiment triggered a sell-off in other momentum stocks, including several defense companies and AI-focused stocks like Mitsui Kinzoku.
Meanwhile, analysts believe the market is now beginning to question the high valuations of chip stocks that have led the rally. If giants like Nvidia start to face new competition, investors will have to re-evaluate the impact on other companies in the chip and AI ecosystem.
Consumer stocks like Sanrio and Asics also came under pressure amid escalating diplomatic tensions between Japan and China. For foreign investors, who have been pouring into the Japanese market since April, this could lead to Japan being viewed as a market with idiosyncratic risk, potentially further depressing sentiment. (asd)
Source: Bloomberg.com
