Japan’s Stock Market Plummets: How a Technology Sell-Off is Impacting Asia’s Markets

On Tuesday, a drop in major U.S. tech stocks started to impact Asian markets. Japan’s Nikkei 225, which is heavily influenced by technology, fell by 1.4 percent. Softbank, a key investment firm in Japan, saw a decline of about 5 percent. Its subsidiary, Arm Holdings, which is mainly owned by Softbank, fell over 10 percent on Monday.

Many Asian markets, including those in China and Taiwan, were closed for the Lunar New Year on Tuesday. Markets in mainland China will remain closed for a week.

U.S. tech stocks took a hit on Monday, especially those boosted by excitement around artificial intelligence. This came after a Chinese A.I. company, DeepSeek, claimed it could match advanced chatbot abilities while using fewer costly chips.

Futures on the S&P 500 also dipped during Asian trading on Tuesday, following a 1.5 percent decline in the index the day before. Nvidia, a leading chip company, lost around $600 billion in market value on Monday but showed signs of stability.

Nvidia is part of a group of top tech stocks known as the Magnificent Seven. These companies have driven the market’s growth in recent years, but there are rising worries about the market’s reliance on their performance.

Seema Shah, the chief global strategist at Principal Asset Management, pointed out that while some market vulnerabilities were anticipated this year, developments like DeepSeek emphasize the need for investors to diversify beyond the Magnificent Seven. She noted that the expectation of continual growth in U.S. stocks is now uncertain, especially amidst ongoing inflation and looming tariffs that could affect spending.