Last week’s Jakota markets:
- Japan’s Nikkei 225 dropped 3.5% as stretched valuations in AI linked tech stocks triggered a broad selloff, overshadowing the government’s $135 billion stimulus plan under new Prime Minister Sanae Takaichi
- South Korea’s KOSPI plummeted 3.9%, dragged down by chip makers and fading hopes for a Federal Reserve rate cut, while the won touched a seven month low
- Taiwan’s TAIEX slid 3.5% after robust U.S. employment data heightened fears of a more hawkish Federal Reserve and reignited AI bubble concerns
- The JAKOTA Blue Chip 150 Index sank 3.9%, with Nidec leading the losses on governance concerns and investors rotating into defensive retailer Aeon
Japan
Japan’s stock market tumbled during a volatile week, with the Nikkei 225 falling 3.5% as a sharp selloff in AI linked tech stocks pulled the market lower amid persistent concerns about stretched valuations.
The Japanese government approved a ¥21.3 trillion ($135 billion) stimulus package, fulfilling investor expectations under new Prime Minister Sanae Takaichi. The plan, which combines spending measures, tax incentives and targeted investment in sectors including shipbuilding and AI, aims to bolster growth and cushion households from the effects of persistent inflation.
Worries over the strain on Japan’s already fragile public finances weighed on the yen. In the bond market, 10 year government bond yields climbed to 1.78% from 1.7% at the end of the previous week, after briefly touching a 17 year high.
On the economic front, consumer inflation held firmly above the Bank of Japan’s (BoJ) 2% target, with core CPI rising 3% in October from a year earlier, matching forecasts and edging up from 2.9% in September. Governor Kazuo Ueda highlighted the inflationary impulse stemming from the weaker yen, which is driving up import costs and filtering through to domestic prices.
Separate data revealed the economy contracted at an annualised pace of 1.8% in the third quarter, a milder decline than the 2.4% drop economists had projected. This followed a revised 2.3% expansion in the previous quarter. External demand remained soft, weighed down by the continued impact of U.S. tariffs on Japan’s export sector.
South Korea
South Korea’s stock market lost ground this week, with the KOSPI tumbling 3.9%, led lower by chip makers and other tech stocks as fading expectations for a Federal Reserve rate cut and valuation concerns surrounding AI related stocks weighed on investor sentiment.
The won slumped to a seven month low against the U.S. dollar, driven by heavy foreign selling in the equities market.
Meanwhile, South Korea’s Financial Services Commission (FSC), Financial Supervisory Service (FSS) and Korea Exchange unveiled a broad package of reforms to strengthen corporate disclosure practices. The measures focus on expanding mandatory English disclosures in phases through 2028, extending requirements to a wider pool of KOSPI listed companies, increasing the number of disclosure items covered, providing greater translation support and improving the usability of English language platforms such as DART.
Regulators also plan enhancements to disclosure surrounding annual general meetings (AGMs), including mandating the release of detailed voting results starting in 2026, encouraging companies to spread out AGM schedules and tightening rules around executive compensation by requiring clearer links between pay and performance as well as fuller disclosure of stock based compensation. The FSC intends to revise relevant regulations by early 2026, with the goal of improving market accessibility for global investors, strengthening shareholder rights and aligning Korea’s disclosure standards more closely with global norms.
Taiwan
Taiwan’s stock market tumbled this week, with the TAIEX dropping 3.5% as stronger than expected U.S. September jobs data sparked concerns that the Federal Reserve may adopt a more hawkish stance on rate cuts and renewed fears of an AI bubble.
JAKOTA Blue Chip 150 Index
The JAKOTA Blue Chip 150 Index fell 3.9% for the week, with only 36 of its 150 constituents posting gains.
Aeon, one of Japan’s largest retail companies, was the index’s top performer, with shares surging around 14.9% as investors rotated into defensive stocks amid heightened volatility in tech stocks.
Nidec, a Japanese manufacturer and distributor of electric motors, led the losses on the JAKOTA Blue Chip 150 Index, with shares sliding 14.5% this week as an ongoing governance and accounting probe continued to cloud the outlook and raised the risk of further regulatory action. The company said it would submit an improvement plan to the Tokyo Stock Exchange after being placed on “special alert” and has withdrawn its full year profit forecast. Meanwhile, Moody’s cut Nidec’s issuer rating to Baa3 from Baa1, citing heightened risks tied to governance and financial weaknesses.
