Nikkei drops 2.5% as chip stocks crater and bond yields hit multi-decade highs

The Nikkei 225 closed at 67,460.73 on August 19, losing roughly 2.54% after sliding from 69,220.25 in the prior session. That makes two consecutive days of declines for Japan’s benchmark equity index, with semiconductor stocks doing most of the damage and rising government bond yields twisting the knife. The index peaked near 73,007 in June, which means it has shed more than 7% from its all-time high in just a couple of months. Chip stocks are taking the biggest hit The usual suspects are leading the sell-off. Advantest and Tokyo Electron, two of Japan’s most important semiconductor equipment makers, have seen their shares fall between 4% and 9% or more during recent weeks. Kioxia, the memory chipmaker, has also been caught in the downdraft. South Korean chip giants Samsung and SK Hynix have faced similar pressure, and US tech sentiment has turned sour as investors question whether the enormous capital expenditure pouring into AI infrastructure will actually generate returns anytime soon. The Nikkei suffered a nearly 4% single-day drop on July 28, driven by essentially the same fears. The pattern has repeated throughout July and August 2026, creating a stretch of volatility that ha...