Japanese stocks fall as AI funding worries weigh on markets

Japan’s Nikkei 225 fell 2.15% on Monday, and the broader Topix index declined 1.17%.[2] The Nikkei had already lost 5.4% during the previous week.[1] It fell as much as 2.3% on Monday and was on course for a 10% decline from its October 6 high of 70,683.98.[3] The declines came as Asian share markets weakened amid concerns about the funding needs of AI, while South Korea’s market dropped 1.6% after shedding more than 14% the previous week.[1]

The market concern is not only how much companies are spending, but whether future AI revenue can cover the investment.[1] Rising government bond yields and wider corporate credit spreads are increasing financing costs, making borrowing and refinancing harder and putting pressure on the AI infrastructure build-out.[1] Investors have also worried that infrastructure could need to be written down as it ages and depreciates.[1] Goldman Sachs expected five AI hyperscalers, including Meta, to raise combined capital spending to about $1.2 trillion next year.[1]

Investors carried Friday’s technology-led Wall Street rout into the new week.[2] The US semiconductor sector’s benchmark lost roughly 16% during an eight-session selloff, the sector’s longest since 2008.[4] The Nasdaq 100 also had its worst week since April 2025.[4] The funding concerns matter across the AI supply chain because mounting financing costs could curb spending needed to sustain the boom and threaten earnings.[4]

Investors were bracing for a heavy slate of earnings and Chinese economic data.[2] Meta was scheduled to report on Wednesday alongside semiconductor companies Lam Research and Texas Instruments.[1] Overall earnings were still expected to rise 30%, driven by large profits at technology companies.[1] Oil had risen to $110 a barrel for the first time since May, stoking inflation concerns.[4] A subsequent decline in oil prices offered some support to bonds and Wall Street stock futures, limiting losses in Asia; Brent futures fell 1.6% to $108.06 a barrel and US crude futures fell 0.7% to $100.70.[1]