Nikkei Rebounds 2% After Tech Selloff Pushed Japanese Stocks Into Bear Market

The broader Topix rose 2.8% to 3,810.91, according to Al Bayan's market report.

The rebound follows a week of heavy selling in AI-linked shares around the world. Investors worried that Democratic gains in the US midterm elections would bring tighter oversight of AI and slow spending on data centres, and those concerns pushed the Nasdaq into a correction. Tokyo's market, heavily weighted toward chip and technology names, took one of the biggest hits.

Monday's gains were led by Renesas Electronics, the automotive and industrial chipmaker, which rose 6.64%. Japan Steel Works gained 6.41%, and consultancy BayCurrent climbed 5.88% and was heading for a record close.

Not every AI stock recovered. SoftBank Group, which has staked much of its strategy on OpenAI and AI infrastructure, fell 4.73%. Property developers Tokyo Fudosan Holdings and Mitsui Fudosan were the other main losers, falling 5.41% and 4.50% respectively.

Other Asian markets also bounced. Taiwan's Taiex rose as much as 5% on Monday after regulators sharply curbed short selling and authorised a state fund to buy up to NT$500 billion of shares, ending the island's longest losing streak since 2022.

The week brings several tests for the AI trade. US consumer price data and results from CoreWeave, the Nvidia-backed cloud provider, are due, and Nvidia shares remain under pressure after its board opened an independent inquiry into chief executive Jensen Huang. Investors in Tokyo will be watching whether Monday's bounce holds once those numbers arrive.