The Nikkei 225 index fell more than 1,700 points in early trading on the 29th, hitting a low of 60,448.90 points before recovering somewhat. Selling pressure was mainly concentrated in the semiconductor sector, coupled with concerns about slowing demand for AI-related products, dragging down the Japanese stock market.

Semiconductor stocks under pressure

Semiconductor-related stocks were the main drag on this round of decline. Market doubts about the sustainability of AI-related demand led to a decline in related stocks, causing the index to fall rapidly.

Yen carry trades attract attention

The yen's near 40-year low against the dollar has exacerbated concerns about the unwinding of carry trades. Traders worry that stock market volatility could intensify once funds begin to withdraw from high-risk assets.

Asian markets weakened in tandem.

This sell-off isn't limited to Japan. South Korea's KOSPI also continued to face pressure after its recent circuit breaker halt, indicating generally weak sentiment in Asian stock markets and increased caution among investors towards highly valued technology stocks.