TOKYO - The Nikkei stock index suffered the third-largest single-day point drop on Thursday, losing over 3,300 points, as selling of artificial intelligence- and semiconductor-related shares accelerated amid growing concerns over their profitability.
The 225-issue Nikkei Stock Average ended down 3,318.34 points, or 4.90 percent, from Wednesday at 64,425.95. The broader Topix index finished 97.44 points, or 2.38 percent, lower at 3,999.34.
On the top-tier Prime Market, the main decliners were nonferrous metal, electric appliance and glass and ceramics product issues.
The U.S. dollar weakened, briefly falling to the mid-157 yen range in Tokyo, as the yen, which is viewed as a relatively safe asset, was bought following the benchmark Nikkei index's plunge.
At 5 p.m., the dollar fetched 157.86-88 yen compared with 158.26-36 yen in New York and 158.34-35 yen in Tokyo at 5 p.m. Wednesday.
The euro was quoted at $1.1210-1211 and 176.97-177.01 yen against $1.1152-1162 and 176.59-69 yen in New York and $1.1198-1200 and 177.32-36 yen in Tokyo late Wednesday afternoon.
The yield on the benchmark 10-year Japanese government bond ended down 0.075 percentage point from Wednesday's close at 2.920 percent, the lowest level in about a month, following a decline in U.S. Treasury yields.
Selling was triggered by the release of a stronger-than-expected U.S. consumer price index for September, which boosted expectations of another U.S. Federal Reserve rate hike in October, while a Beige Book highlighting persistent inflationary pressures also weighed on market sentiment.
Investor sentiment was further dampened after corporate bonds issued by major U.S. data center operator CoreWeave Inc. plunged, prompting selling in AI- and chip-related shares and driving investors into a risk-off stance, dealers said.
"Rising hopes for profitability in AI-related businesses were betrayed by the news," said Wataru Akiyama, strategist in the Investment Content Department of Nomura Securities Co., adding that recent earnings reports from major U.S. cloud service providers were robust.
The benchmark Nikkei index briefly tumbled over 5 percent. The index has shed over 6,200 points in a six-trading-day losing streak.
The decline "merely wiped out some of the gains made over the past few months," said Toshikazu Horiuchi, equity strategist at IwaiCosmo Securities Co., noting that the downtrend is unlikely to last long.
Because many stocks are "still seen as undervalued, (investors are) likely to review them in the upcoming earnings season" amid upward revisions of Japanese companies' earnings, he added.
