Japanese Stocks Plunge, Nikkei Falls Over 2,100 Points Below 65,000

Japanese stock markets suffered a severe downturn on Friday, with the Nikkei 225 index plummeting by approximately 2,100 points to fall below the 65,000 mark. The index closed at 64,740 points, marking a decline of over 3% in a single day.

The sharp fall was largely attributed to a heavy sell-off in chip stocks, fueling market concerns about whether the substantial capital expenditures in artificial intelligence (AI) can justify current high valuations. This trend follows a broader weakening in U.S. markets the previous day, where major indices closed lower. The Philadelphia Semiconductor Index, in particular, saw a significant drop of over 4%.

While the Nikkei experienced a substantial loss, South Korean markets were closed for a holiday, thus avoiding the immediate impact of the global tech sell-off. The decline in Japanese stocks began at the opening, with the index falling 496 points, and continued downward throughout the trading session as tech stocks faced persistent selling pressure.

The market's anxieties are compounded by rising geopolitical tensions between the U.S. and Iran, which contributed to the negative sentiment in global markets. Investors are closely watching the sustainability of AI-driven growth and its impact on corporate valuations.