The Nikkei 225 Index fell 1% to below 42,300 on Monday, extending losses from the previous session and mirroring a selloff on Wall Street after fresh US inflation data pointed to rising prices. Sentiment was also weighed by a US federal appeals court ruling that President Donald Trump’s reciprocal tariffs are illegal, with the administration given until October 14 to appeal to the US Supreme Court. Domestically, data showed Japanese companies boosted capital spending by 7.6% in Q2 2025, up from 6.4% in Q1 and above forecasts of 6.2%. Technology shares led the downturn following similar losses in the US, with steep declines from Advantest (-6.3%), Disco (-6.8%), SoftBank Group (-4.3%), Lasertec (-3%), and Tokyo Electron (-1.7%).