DeepSeek Shockwave Once Again Sends Tech Stocks Tumbling in Tokyo
The shockwave triggered by China’s AI model DeepSeek, which previously impacted Wall Street, has once again caused tech stocks to plummet on the Tokyo Stock Exchange. This comes as much of the rest of Asia begins celebrating the Lunar New Year holidays.
As of approximately 00:45 GMT, Japan’s Nikkei index fell by 1.26% to 39,066.75 points, while the broader Topix index declined by 0.34% to 2,748.55 points, primarily due to falling tech shares.
By introducing an exceptionally powerful conversational agent that operates efficiently on low-capacity chips and is developed at a minimal cost, the Chinese startup DeepSeek is challenging American AI giants and undermining investor confidence.
On Monday, tech stocks linked to semiconductors and AI had already experienced significant declines ahead of the market turmoil that later affected European markets and Wall Street, where a major American chip company saw its shares plummet by 17% amid widespread panic.
In conjunction with gold and U.S. Treasury bonds, the yen surged on Monday, benefiting from its status as a safe haven for investors looking to escape the turmoil in the stock market. Gold continued its upward trend on Tuesday, gaining 0.15% to reach $2,744.83 per ounce by 00:45 GMT.
Following its sharp decline the previous day, the dollar attempted a recovery on Tuesday at the start of Asian trading, rising by 0.63% against the Japanese currency to reach 155.16 yen per dollar around 00:45 GMT.
Additionally, the U.S. currency was supported by renewed concerns over trade tensions following the confirmation of financier Scott Bessent as Secretary of the Treasury, who is a strong advocate for significant increases in the country’s tariffs.
The Hong Kong Stock Exchange will operate for only half a day on Tuesday, just before the Lunar New Year. Meanwhile, the markets in mainland China are already closed and will remain so until Wednesday, February 5.
