Nikkei Enters Bear Market as AI Selloff Spreads Across Asia on November 6, 2026

Japan’s Nikkei 225 entered a bear market on Friday, November 6, 2026, after falling about 6 percent in a single session and closing more than 20 percent below its June record high. The index ended the day at 57,420.23, down 5.99 percent, after briefly dropping below 57,000 during trading. The selloff spread from Wall Street, where the Nasdaq had its worst day since April 2025 on Thursday. Chip stocks led the fall in Tokyo, with SoftBank, Advantest, and Kioxia all down by double digits. South Korea and Taiwan fell hard too, and Seoul even halted trading for 20 minutes after a circuit breaker tripped.

Quick Facts

How Far the Nikkei Fell on Friday

Friday was a brutal day for Japanese stocks. The Nikkei 225 opened sharply lower and never found its footing. By the close it had lost 5.99 percent to finish at 57,420.23. At its worst point in the session, the index slipped below 57,000, a fall of as much as about 7 percent from the prior close. The broader Topix index fell about 5.8 percent, which showed that the damage went well beyond a handful of big names.

The size of the drop matters because of where it leaves the index compared with its high. The Nikkei set an intraday peak of 72,831.73 on June 22. Friday’s close sits more than 20 percent below that peak. In market terms, a fall of 20 percent or more from a recent high is what defines a bear market. That is why Friday is not just another bad day. It marks a formal shift in how traders now describe the Japanese market.

Japan’s Prime Minister Takaichi spoke about the drop on Friday. She said it is too early to say whether the drop is temporary. That careful wording left the question open for investors who were hoping for a quick reassurance.

The AI Stocks That Led the Drop in Tokyo

The heaviest losses in Tokyo came from the same kinds of stocks that had driven the rally. SoftBank fell about 11 percent. Advantest, a key maker of chip testing equipment, dropped about 12 percent. Kioxia, a major memory chip maker, fell about 11 to 12 percent. Tokyo Electron, another chip equipment giant, lost about 9 percent. These are not small companies. They sit at the center of Japan’s role in the global chip supply chain, and their falls pulled the whole index down with them.

Some smaller names fell even harder. Rohm dropped about 20 percent. Furukawa Electric fell about 19 percent. Moves of that size in a single day are rare for large listed companies, and they show how fast sentiment turned. When traders decide to sell a theme, they often sell the whole group at once, and Friday was a clear case of that pattern.

The link to the United States was direct. On Thursday, the Philadelphia Semiconductor Index fell about 12.25 percent, Micron dropped 17 percent, and Nvidia fell 9 percent. The Magnificent Seven shed over 1 trillion dollars in one day. Asian chip makers supply the same data center boom, so they share the same risk when that boom comes into doubt.

For months, the story in Tokyo was simple. Artificial intelligence spending was rising, data centers needed more chips, and Japanese equipment makers would benefit. Friday flipped that story around. Traders began to ask what happens if data center building slows, and the answer in the market was to sell first and ask questions later. That is how a strong theme turns into a rout.

South Korea and Taiwan Caught the Same Wave

Japan was not alone. South Korea’s Kospi fell about 8.55 percent to 4,923.47. The fall was so sharp and so fast that the exchange tripped a circuit breaker, which froze trading for 20 minutes. Circuit breakers exist to give traders a pause during panic selling, and the fact that one was needed shows how intense the selling became. Samsung fell about 10 percent, and SK Hynix, a leading memory chip maker, dropped about 12 percent.

Taiwan dropped about 9 percent on the day. Taiwan sits at the heart of global chip making, so a selloff in semiconductor stocks hits its market hard. The pattern across the region was the same in every market. Chip stocks fell first and fell hardest, and the rest of the market followed.

The regional sweep is what makes Friday stand out. This was not a Japan only story. It was an Asia wide repricing of the same trade. Investors in Tokyo, Seoul, and Taipei all reached the same conclusion at the same time. The AI rally that had lifted their markets for months was now working in reverse.

Why the Midterm Results Shook AI Stocks

The trigger for the selloff was political. Democrats won control of both the House and Senate in the midterm elections. Markets read that result as a threat to the pace of AI data center construction. The logic is straightforward. A divided or changed political landscape raises questions about permits, energy policy, and the speed at which huge data center projects can move ahead.

This reaction may surprise some readers. Elections do not change chip demand overnight. Data centers already under construction do not stop because of a vote. But stock markets trade on what investors expect to happen next, not only on what is happening today. When expectations change, prices move fast. The AI trade had been built on a simple belief, that spending would keep rising without pause. The midterm result cracked that belief.

Thursday’s US numbers show how hard the market reacted. The Nasdaq Composite fell 5.52 percent to 24,315. The S and P 500 dropped 4.36 percent to 7,353.73. The Dow fell 3.44 percent, or 1,833 points, to 51,523.06. It was the worst day for US stocks since April 2025. The scale of those losses set the tone for Asia on Friday.

For more on how Thursday unfolded on Wall Street, read our report on the Nasdaq correction and the Dow plunge of 1,833 points on November 5. The global picture is covered in our piece on the global stocks slide after the Democratic sweep and AI data center fears.

What Traders Watch Next

Friday morning brought a small sign of calm in US futures. Nasdaq 100 futures were up about 1 percent, and S and P futures were near flat. That does not mean the selloff is over. Futures move quickly, and a modest bounce after a huge fall is common. But it does suggest that some traders were willing to step in after Thursday’s drop, at least for now.

The next big test comes with the October US jobs report, due at 8:30 AM ET on Friday. It is expected to show about 59,000 payrolls added, with unemployment at 4.2 percent. A strong report could ease fears about the wider economy, while a weak one could add to the worry. Either way, traders will read the numbers closely for clues about growth and about what the Federal Reserve may do next.

Another question is whether Asian markets can find a floor. A bear market label alone does not stop selling. What stops it is usually a change in the news, a sign that spending plans are safe, or prices falling far enough that buyers return. Until one of those things happens, traders in Tokyo, Seoul, and Taipei will stay cautious. The coming US session will be the first chance to see whether Wall Street steadies or falls further, and Asia will take its cue from that.

Cloud earnings have also been part of the wider tech picture this season. Our coverage of the Cloudflare Q3 earnings beat, with revenue of 782 million dollars and a stock jump, shows how results from cloud firms have been moving shares in this same period.

What does it mean that the Nikkei is in a bear market?

It means the Nikkei 225 has fallen more than 20 percent from its recent peak. The index hit an intraday high of 72,831.73 on June 22, and Friday’s close of 57,420.23 sits more than 20 percent below that level. Traders use the 20 percent line as the standard marker for a bear market.

Why did Asian stocks fall so sharply on November 6?

The fall followed a steep selloff on Wall Street on Thursday, when the Nasdaq dropped 5.52 percent. Democrats winning control of both the House and Senate raised doubts about the pace of AI data center construction, and chip stocks led the decline across the region. Japan, South Korea, and Taiwan all fell hard on the same fear.

Which stocks fell the most in Tokyo?

Chip and AI related names led the losses. SoftBank fell about 11 percent, Advantest about 12 percent, Kioxia about 11 to 12 percent, and Tokyo Electron about 9 percent. Rohm dropped about 20 percent and Furukawa Electric fell about 19 percent. The broader Topix index fell about 5.8 percent.

What happens next for the Nikkei?

Traders will watch the October US jobs report, due at 8:30 AM ET on Friday, and the next US trading session for signs of stability. Nasdaq 100 futures were up about 1 percent on Friday morning. Whether the Nikkei steadies will depend on US markets and on fresh news about AI spending plans.

Sources

• Invezz: Nikkei 225 crash November 6, 2026
• Samuel and Co Trading: Morning market brief 6 November 2026, Asia catches Nasdaq correction
• Trading Nerve: October jobs report and AI rout 2026-11-06

Final Thoughts

Friday, November 6, 2026, will be remembered as the day the AI rally hit a wall in Asia. The Nikkei entered a bear market, Seoul halted trading for 20 minutes, and Taiwan fell about 9 percent, all in the space of a single session. The trigger was political, but the fear was about spending. Investors had priced in years of fast data center building, and the midterm result made them question that pace.

None of this means the story is finished. Markets have bounced back from sharp falls before, and US futures were already showing signs of life on Friday morning. The jobs report will give traders fresh data, and the next few sessions will show whether this was a sharp correction or the start of a longer downturn. For now, the AI trade is no longer a one way bet, and traders are watching every new headline with fresh care.