The Tokyo stock market saw a significant drop after opening on the 16th, with the Nikkei average temporarily falling by more than 800 yen, approaching the 39,000 yen level. This notable decline was primarily influenced by the sharp drop in U.S. stocks, particularly semiconductor-related stocks.

On the previous trading day, the Philadelphia Semiconductor Index (SOX) in the United States fell by more than 5%. This downward trend spread to the Tokyo market, leading to large-scale selling of Japanese semiconductor-related stocks.

A key factor contributing to this situation was the financial results announcement from ASML Holding, the Dutch semiconductor manufacturing equipment giant. ASML prematurely released its financial report due to a “technical error,” revealing that order volume for the July-September quarter of 2024 significantly decreased compared to the April-June period. Additionally, ASML lowered its sales forecast for the fiscal year ending December 2025. This news was viewed as a “negative surprise” by the market, subsequently affecting the overall performance of Japan’s semiconductor-related industries.

The slow recovery in demand for ASML’s EUV (Extreme Ultraviolet) lithography equipment is believed to be closely related to the business performance in this field. As a result, laser technology-related stocks saw sharp declines, and companies such as Tokyo Electron (TOELEC) experienced significant drops in stock prices.

Notably, the Nikkei average had briefly surpassed the 40,000 yen mark on the previous day. Recently, the Japanese stock market had been experiencing a unilateral upward trend due to an influx of overseas speculative funds. However, today’s market trend completely reversed, with selling pressure noticeably increasing.

In this market environment, some stocks related to domestic demand gained favor. For example, AEON and construction-related stocks saw defensive buying. This reflects investors’ preference for relatively stable domestic demand sectors during periods of market turbulence.

The Tokyo Stock Exchange Price Index (TOPIX) also experienced a decline, indicating overall market pressure.

Looking at individual stock performances, technology and electronics-related stocks such as SoftBank Group (SBG), Advantest, Fastri, and TDK saw notable price drops. In contrast, companies like Obayashi Corporation, Toho, and Yamato HD saw their stock prices rise against the market trend.

This market trend reflects investors’ concerns about the prospects of the global semiconductor industry while also highlighting the performance differences between various industry sectors during market fluctuations. The semiconductor industry, often seen as a barometer of global technological development, has its trends frequently viewed as important indicators of overall economic and technological development trends.

This fluctuation in the Japanese stock market also underscores the interconnectedness of global financial markets. Changes in the U.S. market quickly transmit to Asian markets, influencing investor sentiment and decision-making. At the same time, the fact that a single company’s (like ASML) profit warning can trigger stock price fluctuations across an entire industry reflects the current market’s sensitivity and vulnerability.

Key points:

• The Tokyo stock market’s Nikkei average opened with a significant drop, falling by more than 800 yen at one point.
• The U.S. Philadelphia Semiconductor Index fell by over 5% the previous day, with effects spreading to the Tokyo market.
• ASML Holding’s financial report was unexpectedly released early, showing a significant decrease in order volume and lowered sales forecast.
• Japanese semiconductor-related stocks experienced large-scale selling, with companies like Tokyo Electron seeing sharp drops in stock prices.
• Some domestic demand-related stocks like AEON and construction stocks gained favor against the market trend.
• Technology stocks such as SoftBank Group and Advantest fell, while companies like Obayashi Corporation and Toho saw stock price increases.
• The market trend reflects investors’ concerns about the global semiconductor industry outlook and the performance differences between various industry sectors.