Japan's Nikkei drops nearly 3% ahead of US midterm election results

Japan’s Nikkei share average fell around 3% on Wednesday as investors awaited US midterm election results, returning from a public holiday to uncertainty over congressional control and the outlook for technology stocks.

Reuters reported the decline alongside softer US stock futures and a weaker dollar.

Nikkei stood at 61,205.38, a 2.97% drop (1,876.48) as of 10:40 AM Tokyo (GMT+9).

Investors were assessing whether Democrats could take the House of Representatives and secure enough Senate gains to challenge President Donald Trump’s Republican majority.

The election is not the only pressure.

Bloomberg reported that disappointing US technology earnings had triggered a 7.2% fall in the Philadelphia Semiconductor Index before Japan’s holiday, adding to concerns about technology valuations and domestic corporate earnings.

Investors are weighing how congressional outcomes could affect policy, while avoiding premature conclusions from incomplete results.

The selloff highlights how US political uncertainty and technology earnings can spill into Japanese equities. However, divergent Asian performances show investors are responding to multiple pressures, not one election narrative.

Watch Japan’s closing figures, verified US congressional results and subsequent currency moves.

Corporate earnings and semiconductor shares will help establish whether the decline reflects temporary caution or deeper market concerns.