Japan's TOPIX index falls 1% to 3,050.99

Japan's TOPIX index falls 1% to 3,050.99

The Japanese equities market experienced a notable decline on September 2, 2025, with the TOPIX index falling by 1% to 3,050.99. The drop was primarily driven by a significant sell-off in tech stocks, particularly those related to artificial intelligence (AI). The market's reaction was influenced by weekend declines in Nvidia and Dell Technologies on the US stock market.

The Topix Index, which tracks the performance of all listed stocks on the Tokyo Stock Exchange, fell by 0.4% to 3,063.19, while the Nikkei index dropped by 1.2% to 42,188.79. SoftBank Group Corp., a major contributor to the Topix Index, saw its stock price decrease by 4.8% [1].

Investors offloaded tech shares following the weekend's negative developments in the US market. "Look how far things have come with AI-chip names like Nvidia having run ahead," said Hiroyuki Ueno, a chief strategist at Sumitomo Mitsui Trust Asset Management. "Everything is getting expensive and some investors already felt valuations were stretched. In that environment, headlines about Nvidia and the like tend to hit the sector directly" [1].

The selling pressure extended to electronics, machinery, and precision equipment shares, as well as non-ferrous metal stocks. Despite this, domestic demand-dependent sectors such as pharmaceuticals and food remained relatively firm. Hitoshi Asaoka, chief strategist at Asset Management One, noted that "there had been too much capital crowding into semiconductor stocks and 'valuations had run up, and what we’re seeing now is the corrective reaction'" [1].

Not all sectors were affected equally. For instance, IIJ, Olympus, and Nihon M&A Center experienced positive growth, while Advantest, Disco, and Socionext faced significant declines. The Tokyo Stock Exchange TOPIX Electric Power & Gas Index was the best performer, while the TOPIX Nonferrous Metals Index was the worst [1].

The broader Asian market also saw some volatility, with the MSCI AC Asia Pacific Index up by 0.2%. The Topix 500 index, which includes the largest companies listed on the Tokyo Stock Exchange, has seen a year-to-date growth of 9.5% compared to the MSCI AC Asia Pacific Index's 17% growth [1].

References:
[1] https://www.energyconnects.com/news/oil/2025/september/japanese-equities-slump-as-investors-dump-tech-stocks/