Japan Stocks Fall as Bond Market Concerns Cool AI Risk Appetite

Odaily News—The Nikkei 225 index fell for a second consecutive day, with chip-related stocks under pressure, while a surge in bond yields raised market concerns, cooling investors' risk appetite for AI trades. At the market open, the Nikkei 225 dropped more than 3%, with memory chip maker Kioxia Holdings and fiber optic cable maker Furukawa Electric among the biggest decliners. The Topix index fell as much as 2.8%, dragged down by electronics and banking stocks.

A chief strategist at Daiwa Asset Management said: "Rising yields will push up borrowing costs for hyperscale cloud service providers, raising questions about capital expenditure prospects and potentially impacting infrastructure companies that have benefited from the AI investment boom." On Tuesday, Japan's 10-year government bond yield rose to its highest level since 1996, amid market speculation that the Bank of Japan may raise interest rates next month. Meanwhile, the 10-year U.S. Treasury yield also hovered near its highest level since early 2025. (Jin Shi)