In the Tokyo stock market on the morning of November 4, the Nikkei Stock Average extended its decline, with the drop from the previous trading day at one point exceeding 2,000 points. During trading hours, the index broke below the 61,000 milestone and at one point hit its lowest level since July 30. Amid caution over the outcome of the U.S. midterm elections as vote counting proceeds, selling has concentrated in leading artificial intelligence (AI) and semiconductor-related stocks.
By mid-morning, the index had fallen to the 61,600 level, down about 1,400 points from the previous day, marking its first break below 62,000 since October 23. A growing view in the market is that the opposition Democratic Party—seen as favorable toward regulating AI and data center construction—is gaining an edge in both chambers of Congress, fueling concerns that if the party becomes the majority in the U.S. Congress, massive investment by large cloud service providers (hyperscalers) could slow.
Among individual stocks, high-priced AI and semiconductor-related names such as Kioxia Holdings, SoftBank Group (9984.T), Tokyo Electron (8035.T), and Advantest (6857.T) were broadly lower. Kyocera (6971.T) and Recruit (6098.T) also widened their declines. On the other hand, Fast Retailing (9983.T), Konami Group (9766.T), and Nitto Denko (6988.T) were higher.
Note: Trading value and volume are approximate figures as of 10 a.m.
During Tokyo trading hours, a decline in Nasdaq-100 Index futures—composed of U.S. high-tech stocks—also prompted selling in Japanese equities. In the South Korean stock market, the Korea Composite Stock Price Index (KOSPI) was also lower, with adjustment pressure on AI-related names being felt across Asia.
A strategist at a Japanese securities firm expressed the view that if the Democratic Party becomes the majority in the U.S. Congress and AI regulation is strengthened, it would become an obstacle to massive investment by hyperscalers and a headwind for Japanese companies that have benefited from expanded investment. Some market participants also analyzed that, with the Democratic Party's seat count growing at a faster pace than initially expected, concerns over stricter data center regulation after the election have intensified, leading to downward pressure on AI and semiconductor-related stocks.
The U.S. midterm elections are at the stage where vote counting has gradually begun, and there have been cases where Democratic candidates have been reported as projected winners. Until the congressional landscape regarding AI investment regulation takes shape, volatile price movements in related stocks may continue.
