The Nikkei stock index extended losses, falling more than 4 percent on Wednesday afternoon, after media projections showed that Democrats have retaken control of the House of Representatives in the U.S. midterm elections.
At 12:52 p.m., the 225-issue Nikkei Stock Average was down 2,807.40 points, or 4.45 percent, from Monday at 60,274.46. The broader Topix index was 127.56 points, or 3.25 percent, lower at 3,802.72.
Artificial intelligence- and semiconductor-related shares were heavily sold as investors grew wary that a Democratic sweep could result in stricter regulations on AI, dealers said.
Japanese companies could also be affected if such policy changes are made, as many of them are expanding their businesses in the industry, they added.
Related coverage:
