Nikkei Plunges 3.6%: SoftBank and Advantest Lead Asia's AI Selloff

Japan's Nikkei 225 plunged 3.56% in Wednesday morning trading on November 4, 2026, closing the morning session at 60,835.36, as AI and chip stocks sold off on fears that Democratic gains in the U.S. midterm elections could bring stricter rules for data-centre projects. SoftBank Group tumbled almost 8%, chip-testing maker Advantest fell about 6.4% to almost 7%, and Tokyo Electron dropped 5% to almost 6% — the sharpest Asia reaction yet to election night in the United States.

What happened in Tokyo?

Tokyo was reopening after Tuesday's Culture Day holiday, so Wednesday was its first chance to react to both the U.S. vote and the recent slide in AI shares. The Nikkei opened at 62,973.16, down just 0.17%, then extended its losses through the morning. By 0150 GMT the index was down 3.1% at 61,127.9, according to Reuters, and it closed the morning session down 2,246.50 points, or 3.56%, at 60,835.36, after touching a low of 60,799.11. The broader Topix index fell about 1.85% to 3,857.97. Of the Nikkei's 225 components, 130 fell and 95 rose — a broad selloff, but one led clearly by technology.

The biggest drags were the names most tied to the AI buildout. SoftBank Group, the technology investor, lost roughly 7% in early trading and was down almost 8% by the morning close. Advantest, which makes chip-testing equipment, fell 6.4%, Tokyo Electron dropped 5%, and memory maker Kioxia fell about 10%. Fibre-optic suppliers linked to data-centre wiring were hit too, with Fujikura down 8.2% and Furukawa Electric down 9%. Screen Holdings fell more than 5%, while automakers Honda and Toyota each lost around 2%. Uniqlo operator Fast Retailing was a rare bright spot, adding more than 1%.

Why is it blowing up?

The trigger came from Washington, not Tokyo. As results arrived on U.S. election night, Democrats were projected to take the House and contend strongly for the Senate. Reuters reported that investors sold AI-linked stocks on concerns that a stronger Democratic Congress could lead to stricter rules for data-centre projects and slower AI infrastructure spending. That is the same fear that pushed U.S. Nasdaq-100 futures down about 2% overnight, amplified in Tokyo by a day of catching up after the holiday.

The selloff also landed on a trade that was already fragile. Asian chip stocks had slid earlier in the week on doubts about how long the AI spending boom can last, and South Korea's KOSPI had fallen more than 3% in its previous session. A sudden political risk gave traders a concrete reason to cut the year's most crowded winners first.

How did the rest of Asia trade?

South Korea showed the whiplash most clearly. The KOSPI opened up 2.4% at 5,786.13, lifted by overnight gains in U.S. chipmakers, with Samsung Electronics up 1.94% and SK hynix up 3.86% in early trade. By mid-morning it had reversed completely, falling 1.5% to 5,564.34 and later below 5,500, as foreign investors sold a net 632.7 billion won and Samsung and SK hynix turned negative. The smaller KOSDAQ fell more than 2% to below 700. Elsewhere, Hong Kong's Hang Seng slipped about 0.3%, China's Shanghai Composite eased about 0.2%, Singapore fell about 1.3%, and Australia's S&P/ASX 200 lost about 0.5%. Taiwan was a partial exception early, opening slightly higher as TSMC rose about 1%.

Key facts

Nikkei 225: down 3.56% at the morning close to 60,835.36, its first drop below 62,000 in 12 sessions at one point in the morning. Topix: down about 1.85%. SoftBank Group: down almost 8%. Advantest: down 6.4% to almost 7%. Tokyo Electron: down 5% to almost 6%. Kioxia: down about 10%. KOSPI: opened +2.4%, then fell about 1.5% to 2% as foreign selling hit chip shares.

Sources: Reuters via Europe Says, InvestingLive, dpa-AFX via TradingView, Reuters global markets wrap, Aju Press on the KOSPI reversal.

What's next?

Asia's afternoon session and Europe's open will show whether this was a one-morning catch-up move or the start of a wider de-rating of AI shares. The final U.S. Senate result still matters: a confirmed sweep would keep the data-centre regulation story alive, while a split Congress could let buyers treat Wednesday's drop as an overreaction. Either way, the message from Tokyo is clear — the AI trade is now trading on politics as much as on earnings, and that makes it far more volatile than it was a week ago. This report describes what happened and why markets reacted; it is not a recommendation to buy, sell or hold any security.

FAQ

Why did the Nikkei fall 3.6% today?

The Nikkei fell because AI and chip stocks sold off after Democratic gains in the U.S. midterms raised fears of stricter data-centre rules and slower AI spending, with the move amplified by Tokyo reopening after a holiday.

Which Japanese stocks fell the most?

Kioxia fell about 10%, SoftBank Group almost 8%, Advantest about 6.4% to almost 7%, and Tokyo Electron 5% to almost 6%, while Fujikura and Furukawa Electric fell 8.2% and 9%.

Did other Asian markets fall too?

Yes, most did. South Korea's KOSPI reversed an opening gain of 2.4% to fall about 1.5% to 2%, Hong Kong and Shanghai slipped slightly, and Singapore and Australia also traded lower.

Is the U.S. election result final?

No. Democrats were projected to take the House and were contending for the Senate as Asia traded, but final control of Congress had not been confirmed when Tokyo's morning session closed.