Tokyo AI and Data Centre Stocks Fall on US Midterm Fears as Japanese Bond Yields Rise

Advantest, Tokyo Electron and SoftBank Group each lost 3 per cent and cable makers Fujikura and Furukawa Electric fell more than 5 per cent, while the Nikkei pared an intraday slide of as much as 4.8 per cent.

By Nakoda News Desk

1 day ago·2 min read

Prefer Nakoda News on Google

Japanese shares closed lower on Wednesday, the first session after a public holiday. Stocks tied to artificial intelligence took the heaviest losses as investors worried that Democratic gains in the US midterm elections could bring tighter rules on data centre projects and slower spending on AI infrastructure, according to a report in the Dubai newspaper Al Bayan.

The Nikkei share average closed at 62,188.63 points. At its low for the day it was down as much as 4.8 per cent, its weakest level since May 20. The broader Topix index fell 0.89 per cent to 3,895.38.

Chip testing equipment maker Advantest and Tokyo Electron each lost 3 per cent, as did technology investor SoftBank Group. Fujikura and Furukawa Electric, which make materials and components used in data centres, fell further, closing down 5.64 per cent and 6.19 per cent respectively.

Bond Market Reverses

Japanese government bond yields rose over the session. The 10-year yield went up 3.5 basis points to 2.805 per cent after dropping to 2.77 per cent earlier in the day, and the 30-year yield climbed five basis points to 3.925 per cent.

Masayuki Koguchi, an executive fund manager at Mitsubishi UFJ Asset Management, said investors had prepared for the worst-case reaction from President Donald Trump to his party's election losses by selling equities and buying bonds. Because Trump's comments were more moderate than expected, Koguchi said, investors then unwound those positions.

Why It Matters

The sell-off in Tokyo adds to the pressure on the AI supply chain elsewhere in Asia after the US vote. Democrats won control of both chambers of Congress, and Texas, which holds a large share of planned US data centre capacity, elected a governor who supports a moratorium on construction. Local measures to restrict data centres also appear to have passed in several US communities.

Japanese companies such as Advantest and Tokyo Electron supply the equipment used to test and make AI chips, and Fujikura and Furukawa Electric sell optical fibre and cabling into data centre builds. Their share prices therefore depend on the pace of US hyperscaler spending. Wednesday's moves show that investors now count US domestic politics, and not only chip demand, among the risks to the AI build-out.