Japan's Nikkei slumps 5.5% as market rout deepens on AI worries

TOKYO - Japan's Nikkei share average fell more than 5% on Friday as fears of regulatory scrutiny and a slowdown in the AI buildout weighed on sentiment following the Democratic sweep in the US midterm elections.

Overnight, the S&P 500 and the Nasdaq indexes suffered their steepest fall since April 2025.

Friday's selloff in Tokyo extends a rout in Japanese tech stocks that began on Wednesday, as the results of the elections started to be known.

The Nikkei was down 5.5% at 57,713.19 as of 0018 GMT, 18 minutes into the trading day.

Losses were set to deepen with most of the major chip and AI stocks yet to trade, including Advantest and SoftBank Group.

The broader Topix lost 4.9%.

(Reporting by Kevin Buckland; Editing by Muralikumar Anantharaman)