Japanese stocks plunge as AI deleverage sends Kioxia down 16%

Japanese stocks experienced a sharp decline driven by a broad AI-related deleveraging, with memory chipmaker Kioxia falling 16%. The sell-off reflects investor concerns over overvaluation in the AI sector and profit-taking after a prolonged rally. The Nikkei 225 dropped over 2% in the session, with technology and semiconductor stocks leading losses. The move comes amid global uncertainty about AI demand sustainability and potential regulatory headwinds. No official statements from Japanese regulators or the Bank of Japan have been issued yet.

Global Impact

Economically, the sell-off could spill over to global tech indices, especially if it triggers margin calls or forced selling. Politically, it may pressure Japanese policymakers to address market stability.