Japan’s benchmark Nikkei 225 index slumped nearly 5% on October 15, 2026, driven down by a global technology selloff. The market plunge was triggered by growing anxieties over distressed debt and rising borrowing costs in the AI infrastructure sector, exacerbated by hotter-than-expected U.S. inflation data.
1. What Triggered the Selloff?
A. CoreWeave Debt and AI Capex Worries
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Bond Yield Spike: Shares of U.S. cloud-computing and AI infrastructure provider CoreWeave dropped over 15% after yields on its corporate bonds jumped close to 15%. This raised urgent alarms across global credit and equity markets regarding the cost of servicing heavy debt taken on to expand AI data centers.
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Profitability Doubts: The spike in high-yield borrowing costs sparked broader fears that major AI-driven infrastructure projects may face financing friction, dampening return expectations for technology hardware suppliers and investors.
B. Hotter U.S. Inflation CPI Print
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Overnight U.S. Consumer Price Index (CPI) data came in higher than projected, stoking fears that the Federal Reserve will maintain high interest rates for longer.
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Elevated benchmark interest rates hit heavily leveraged tech firms and capital-intensive AI companies particularly hard, driving the Nasdaq Composite down nearly 1.9% and spilling over into Asian markets.
2. Key Market Impacts in Japan and Asia
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SoftBank Group Plummets: The tech-focused conglomerate and major AI investor SoftBank Group skidded 9.3%, leading the decline on the Tokyo exchange.
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Semiconductor & Supply Chain Hits: Major Japanese tech and chip equipment stocks tracked heavy losses seen across Asia (where South Korea’s KOSPI tumbled over 7% and memory giant SK Hynix slid more than 11%).
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Sector Rotation into Defensives: As investors rushed out of risk-heavy tech names, traditional defensive sectors offered temporary shelter. Pharmaceuticals led gains in Tokyo, rising ~4%, with Sumitomo Pharma surging 15.8%.
What Investors Should Watch Next
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AI Infrastructure Financing Costs: Spreads and yields on private credit and high-yield corporate bonds tied to AI data centers and GPU clusters.
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U.S. Federal Reserve Rate Expectations: Subsequent economic data releases and Fed commentary following the hot CPI reading.
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Big Tech Capex Guidance: Upcoming quarterly earnings updates from hyperscalers to confirm whether planned AI capital expenditure targets remain intact amidst shifting financial conditions.
