Concerns about the AI bubble are intensifying; last week, the Japanese stock market faced capital outflows.

ME News report, June 4 (UTC+8). According to data from the Japan Exchange Group, for the week ending May 29, overseas investors net sold about 395 billion yen (equivalent to $2.5 billion) of Japanese stocks, ending a streak of eight consecutive weeks of net buying. This sell-off came as the Nikkei 225 index—led by technology stocks—first broke through the 65,000-point level, mainly driven by AI-related stocks such as SoftBank, Kioxia, and Murata Manufacturing. The rapid rise of the Nikkei sparked some market participants’ concerns about overheating, prompting them to take profits.

Pelham Smithers Associates’ Managing Director, Pelham Smithers, said, “More and more people believe that AI is forming a bubble, and we estimate that around 70% of the increase in Japan’s stock market in 2026 will come from AI-related stocks.” He added that as cautious sentiment heats up, some global investors “hope to withdraw from Japan and channel their funds into markets like Europe, where AI is less of a focus.” (Jin10) (Source: ODAILY)