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# Nikkei falls 2% as AI selloff deepens and banks slide in Tokyo
- URL: https://bullquill.com/nikkei-falls-2-percent-ai-selloff-deepens/
- Published: 2026-10-23T02:22:45.000Z
- Updated: 2026-10-24T07:11:10.000Z
- Description: Japan's benchmark extended Thursday's 2.65% drop and touched an intraday low of 61,462.61. Selling spread from chipmakers to SoftBank Group and several large banks.
- Author: Rowan Ashby
- Tags: Markets, Trending, Nikkei 225, SoftBank Group, Tokyo Electron, Japan, Nasdaq, #lang-en, #tr-nikkei-falls-2-percent-ai-selloff-deepens

## Key takeaways

- The Nikkei 225 fell 2.02% to 61,636.04 as of 02:05 UTC on Friday, October 23, 2026, according to Yahoo Finance data, a second straight day of steep losses.
- TradingKey and a Panthère Group market report both linked Friday's drop to the overnight selloff in US technology shares, which followed renewed concern about AI infrastructure spending.
- Selling spread beyond chipmakers: SoftBank Group and several large banks fell 5% to 7% in morning trade, according to the same reports. No source has confirmed a separate reason for the drop in bank shares.
- On Thursday, the index closed down 2.65% at 62,907.84 as Advantest, Tokyo Electron and SoftBank Group slid.

## Why is the Nikkei falling today?

The Nikkei falls continued on Friday as Japan's Nikkei 225 dropped 2.02% to 61,636.04 by 02:05 UTC (11:05 in Tokyo), according to Yahoo Finance, after an overnight US tech selloff. SoftBank Group and several large banks fell 5% to 7%.

Both TradingKey and Panthère Group attributed the decline to weak cues from US markets overnight. TradingKey wrote that the pullback in US technology stocks, driven by worries about heavy AI capital spending and its returns, continued to weigh on Asian sentiment. Panthère Group said technology and financial stocks led the weakness in Tokyo. The selloff hit China too, where the [Shanghai Composite closed at a 52-week low](https://bullquill.com/shanghai-composite-falls-below-52-week-low/) on Oct. 22.

## What happened in Tokyo on Friday morning

Losses were broad. According to Panthère Group, SoftBank Group fell about 6%, while Mizuho, Resona, Mitsubishi Electric, Sumitomo Mitsui Financial and Mitsubishi UFJ Financial each dropped more than 5% or close to it. Chip-related names such as Sumco, Kokusai Electric, Screen Holdings, Tokyo Electron and Advantest also fell. TradingKey reported that memory maker Kioxia dropped more than 7%. The index pared most of the loss by the close; see our [Japan stocks brief for Oct. 23](https://bullquill.com/japan-stocks-daily-brief-2026-10-23/).

Some consumer and defensive stocks rose against the trend. Panthère Group listed gains for Sapporo Holdings, ZOZO, Kikkoman, Aeon, Olympus, Chugai Pharmaceutical and Fast Retailing.

| Measure                             | Level / move       | Time (UTC)              | Source                    |
| ----------------------------------- | ------------------ | ----------------------- | ------------------------- |
| Nikkei 225, Thursday close (Oct 22) | 62,907.84 (-2.65%) | 06:30, Oct 22           | Yahoo Finance, TradingKey |
| Nikkei 225, Friday open             | 62,667.05          | 00:00, Oct 23           | TradingKey                |
| Nikkei 225, Friday intraday low     | 61,462.61          | Morning session, Oct 23 | Panthère Group            |
| Nikkei 225, latest                  | 61,636.04 (-2.02%) | 02:05, Oct 23           | Yahoo Finance             |
| Nasdaq Composite, Thursday close    | 26,008.86 (-2.6%)  | 20:00, Oct 22           | AP via BNN Bloomberg      |
| S&P 500, Thursday close             | 7,663.43 (-1.2%)   | 20:00, Oct 22           | AP via BNN Bloomberg      |
| Brent crude, Thursday               | $113.17/bbl (+4%)  | Oct 22                  | AP via BNN Bloomberg      |

## What we know and what we don't know yet

- **Known:** US stocks fell sharply on Thursday. The Associated Press, via BNN Bloomberg, reported that the S&P 500 had its worst day since July. Nvidia fell 4.4% and Lam Research fell 11.8% despite slightly better-than-expected results.
- **Known:** TradingKey reported that the Philadelphia Semiconductor Index lost 6.72% on Thursday, and that the KOSPI in Seoul fell more than 3% on Friday morning.
- **Known:** Oil prices remain high. AP reported Brent at its highest level in five months.
- **Not confirmed:** No newswire or official source has explained why Japanese bank shares fell so sharply on Friday. The cause of that part of the move has not been confirmed.
- **Not known yet:** Where the index will close. Trading in Tokyo continues until 06:30 UTC, and the figures above may change.

## Background: two days of AI-led selling

Thursday's selloff started with chip stocks. Reuters, as published by Arab News Japan, reported that Tokyo Electron, Screen Holdings and SoftBank Group fell early in the session as investors grew cautious about AI-related spending in 2027\. Wataru Akiyama, equities strategist at Nomura Securities, told Reuters: "The market is looking out to 2027 and if AI capex will continue, and there's quite a lot of caution among investors." Kazuyoshi Saito of Iwai Cosmo Securities pointed to worries about chip equipment demand from China after Lam Research's results.

The losses deepened later on Thursday, and the index closed 2.65% lower. Bullquill covered that session in the [Japan stocks daily brief for October 22](https://bullquill.com/japan-stocks-daily-brief-2026-10-22/), the US move in [Nasdaq falls on AI spending worries](https://bullquill.com/nasdaq-falls-ai-spending-worries-meta-chips/), and the global chip slump in [our semiconductor index explainer](https://bullquill.com/chip-stocks-slump-semiconductor-index-ai-costs/).

## What it means

Friday's drop shows how much Japan's benchmark index now depends on the AI trade. Heavyweights such as SoftBank Group, Tokyo Electron and Advantest have large weightings in the price-weighted Nikkei, so a selloff in US chip and AI stocks can quickly pull the whole index lower. Seoul is under similar pressure, as covered in [KOSPI drops 3% as chip stocks slide](https://bullquill.com/kospi-drops-3-percent-chip-stocks-us-selloff/). Readers following the story may want to watch the Tokyo close at 06:30 UTC, how US technology shares trade on Friday, and further news on AI spending, including [Meta's AI debt costs](https://bullquill.com/meta-credit-default-swaps-record-ai-debt/). For the latest price data ahead of the BoJ meeting, see [Japan core CPI for September 2026](https://bullquill.com/japan-core-inflation-september-2026/).

## Frequently asked questions

### Why is the Nikkei down today?

On October 23, 2026, TradingKey and Panthère Group linked the drop to the overnight selloff in US technology shares, driven by worries about AI capital spending. The reason for the sharp fall in Japanese bank shares had not been confirmed as of 02:05 UTC.

### How much did the Nikkei fall on October 22, 2026?

The Nikkei 225 closed down 2.65% at 62,907.84 on Thursday, October 22, as Advantest, Tokyo Electron and SoftBank Group fell, according to Yahoo Finance and TradingKey.

### What happened on Wall Street before the Nikkei fell?

According to the Associated Press, the Nasdaq Composite fell 2.6% and the S&P 500 fell 1.2% on October 22, its worst day since July, as Nvidia and Lam Research dropped and Brent crude rose to $113.17 a barrel.

## Sources

- [Yahoo Finance: Nikkei 225 (^N225) quote](https://finance.yahoo.com/quote/%5EN225/?ref=bullquill.com)
- [TradingKey: Japan, South Korea stocks open down across the board (Oct 23, 2026)](https://www.tradingkey.com/analysis/stocks/us-stocks/262234717-japan-korea-stocks-open-lower-kospi-nikkei-samsung-kioxia-tradingkey?ref=bullquill.com)
- [Panthère Group: Japanese market sharply lower (Oct 23, 2026)](https://www.pantheregroup.com/2026/10/23/japanese-market-sharply-lower-106/?ref=bullquill.com)
- [TradingKey: Japan and South Korea stocks slump (Oct 22, 2026)](https://tradingkey.com/analysis/stocks/more/262231586-japan-south-korea-stocks-kospi-nikkei-softbank-sk-hynix-samsung-kioxia-tradingkey?ref=bullquill.com)
- [BNN Bloomberg (AP): Stock market today, Oct 22, 2026](https://bnnbloomberg.ca/markets/2026/10/22/world-shares-retreat-as-report-of-damage-to-oil-tankers-pushes-oil-prices-higher?ref=bullquill.com)
- [Arab News Japan (Reuters): Japan's Nikkei slips as chip shares pressured by AI capex caution (Oct 22, 2026)](https://www.arabnews.jp/en/business/japans-nikkei-slips-as-chip-shares-pressured-by-ai-capex-caution-3000983?ref=bullquill.com)

This article is for information only and is not investment advice.