Nikkei Enters Correction as Tech Rout Hits Asia
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- Nikkei 225 confirmed correction territory on Friday, down more than 10% from its June 25 all-time high close, with Japanese and Taiwanese benchmarks falling as much as 6% in a single session as the global tech rout accelerated
- Kei Okamura of Neuberger Berman attributed the selling cascade to Fed hawkishness triggered by Kevin Warsh's shifting comments, noting the pressure first hit "high profile names like SK Hynix and Samsung" before spreading across the board
- SpaceX, trading below its IPO price, was flagged by Christopher Forbes of CMC Markets as "a pretty good proxy for market sentiment," while noting gold and silver have been losing trades and yields keep climbing
- Fabien Yip of IG warned that retail investors' leveraged bets in the AI rally will exaggerate the decline and predicted Korea's reopening Monday would be "quite disastrous" if the US selloff continues into Friday's session
- Wen Xunneng of Zhu Liu Asset Management declared "the global AI bubble is bursting," adding that China's large quant fund complex is amplifying A-share volatility and stabilization will take considerable time
- Gary Tan of Allspring framed the moves as "froth coming out of a crowded AI trade" rather than a knee-jerk reaction to higher yields, with equity flows showing profit-taking in biggest AI winners rather than rotation into laggards
- Naoki Fujiwara of Shinkin Asset Management calculated that a Nikkei drop to 63,000 would put shares at 17 times PER—cheap by historical standards—with next week's Alphabet and other memory-user earnings as the potential rebound catalyst
Why it matters: Chip-heavy Asian benchmarks remain tethered to the SOX index, so any continued AI capex doubts will hit Japan and Taiwan hardest, and unwinding leveraged retail bets risks self-reinforced forced selling—Fabien Yip warned Korea's Monday reopen could be "quite disastrous" if US futures extend the decline, while Alphabet's earnings next week stand as the near-term pivot for sentiment.
