Nikkei Average Falls Below 49,000 Points

On November 18, the Nikkei（日経平均株価） average in Tokyo’s stock market fell for the third consecutive trading day, closing at 48,702 points, a drop of 1,620 yen (3.22%) from the previous trading day. This is the first time the Nikkei average has closed below the 49,000-point mark since October 23. With NVIDIA’s earnings report due early on November 20 (Japan time) and the release of US September employment data on the same day, the market remained wary of overheated artificial intelligence (AI) and semiconductor-related stocks, leading to a significant increase in selling pressure. The Nikkei average also broke below the 25-day moving average, considered a “lower support level,” indicating heightened investor caution.

In the US stock market on November 17, the Dow Jones Industrial Average fell 1.18% from the previous weekend, while the Nasdaq Composite Index, heavily weighted towards technology stocks, fell 0.84%. The continued cautious pronouncements from Federal Reserve (FRB) officials regarding further interest rate cuts, coupled with reports that Peter Thiel, co-founder of Palantir Technologies, sold all his Nvidia shares between July and September, further fueled portfolio adjustments, particularly in AI-related stocks.

This risk aversion also spread to the Japanese stock market. On the 18th, SoftBank Group (SBG) plunged 7.47%, and Tokyo Electron fell 5.46%. More than 80% of stocks on the TOPIX Prime (main board) declined, and value stocks such as banks, which had previously been supported by rotational buying, also saw significant pullbacks. Kazue Kenbe, chief strategist at Daiwa Asset Management, noted, “Adding to concerns about Sino-Japanese relations, investors are currently finding it more psychologically difficult to actively buy.”