Japan’s Nikkei 225 rebounded sharply on Friday as lower US Treasury yields and a late Wall Street recovery encouraged investors back into stocks battered by this week’s AI-led sell-off.
The benchmark rose 1.82% to 65,598.63 by 10:02 am in Tokyo, after plunging 4.9% on Thursday to 64,425.95, its biggest daily percentage decline since March.
The recovery was helped by easing concern over AI financing after Nvidia chief Jensen Huang defended CoreWeave’s financial position.
Gains in Toyota and Mitsubishi UFJ also suggested buying was spreading beyond technology. Even so, Friday’s bounce has repaired only part of the damage from a six-session slide.
Nikkei rebound repairs only part of Thursday’s AI damage
Thursday’s collapse exposed how concentrated the Nikkei’s AI risk has become.
Advantest fell 15%, Tokyo Electron 7.8% and SoftBank Group 9.3% as investors reacted to concerns about CoreWeave’s debt and the sustainability of debt-funded AI spending.
The broader Topix lost just 2.4%, underscoring how the Nikkei’s price-weighted construction amplified the sell-off.
Official Nikkei data show Advantest carried an 11.5% index weight before Friday’s session, with Tokyo Electron above 8%. Technology accounted for almost 44% of the benchmark.
Nomura strategist Wataru Akiyama said that concerns had rapidly shifted towards AI capital expenditure and profitability as investors questioned the financial health of companies funding the build-out.
Broader buying tests Japan’s concentration problem
There are signs that the rebound is becoming healthier. Kioxia and Advantest advanced in early trade, while Lasertec gained around 3%.
Toyota rose about 2.1% and Mitsubishi UFJ roughly 2%, showing demand extending into exporters and financials rather than remaining confined to yesterday’s worst-hit AI names.
That breadth matters because the Nikkei’s concentration has magnified both sides of the AI trade. A rally led only by Advantest, SoftBank and semiconductor shares would leave the benchmark vulnerable to another change in global tech sentiment.
The broader regional recovery was stronger still. South Korea’s KOSPI rose 2.8% after Thursday’s near-8% collapse, Taiwan gained 0.7%, Hong Kong’s Hang Seng advanced 1.1% and Chinese blue chips added 0.3%.
Falling yields offer relief, but the macro risk remains
The most important support for Friday’s rebound came from bonds.
US Treasury yields dropped sharply on Thursday even after hot inflation data, easing the discount-rate pressure on expensive technology stocks.
StoneX senior market analyst Matt Simpson said that the retreat in yields, helped by more dovish Fed remarks, had reduced expectations for an October rate increase.
Huang added another stabilising signal. He told Bloomberg that CoreWeave’s financial position was improving and that Nvidia did not need to provide a financial backstop, comments that helped the company recover from its lows.
Still, Capital Economics chief markets economist Jonas Goltermann warned in a note that the simultaneous fall in equities and Treasury yields could fit the early stages of an unwinding AI boom rather than an ordinary correction.
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