Stocks in Japan followed the downward trajectory of indexes in the United States in a dramatic rout Thursday, entering correction territory after a few weeks of persistent weakness in the market.

The falls in New York were driven in part by the growing belief that artificial intelligence may not deliver what¡¯s been promised, and that spilled over into Japanese tech stocks, which led the broader market down.

Yen strength only added to the pressure.

¡°To the extent that Japan¡¯s markets have underperformed today, it can probably be attributed to the stronger yen,¡± Thomas Mathews, head of Asia-Pacific markets at Capital Economics, said Thursday.

The 225-issue Nikkei average fell 3.28% that day, with SoftBank and Hitachi both down more than 9%. Japanese share prices remained wobbly overnight and into Friday.

Japan¡¯s benchmark index is now down 10% from its July peak, meeting the textbook definition of a market correction.

Thursday¡¯s drop in Tokyo followed a 2.3% decline in the S&P 500 on Wednesday, a 1.2% fall in the Dow Jones Industrial Average and a 3.6% drop in the Nasdaq Composite.

Analysts say the yen¡¯s surprise rally is in part responsible for the fall in the benchmark index, as goods manufactured in Japan become more expensive in the international markets.

¡°A strong yen tends to be a negative factor for Japanese equities,¡± said Yutaka Miura, senior technical analyst at Mizuho Securities.

The currency has gone from ?162 to ?152 to the dollar in the space of two weeks, catching traders and the general public off guard.

A number of reasons have been given by analysts to explain the yen melt-up, including comments by former U.S. President Donald Trump suggesting that the Japanese currency is too weak, a rush to the safe haven of the yen as investors seek to get away from risk, and changing fundamentals in Japan and the United States.

Indications of economic strength in Japan make it more likely that the the Bank of Japan can continue tightening, narrowing the rate gap that has been putting downward pressure on the yen.

The U.S. Federal Reserve and the BOJ will both be meeting next week.

The yen has plummeted against the dollar in the past couple of days as speculation grows that there will be some signs of monetary policy shifts by the Fed and the BOJ.

Market participants are closely watching whether the Fed will indicate a rate cut and the BOJ will raise rates, which would herald the narrowing of interest gap between the U.S. and Japan.

Once the yen rally got rolling, it became a self-fulfilling prophecy, as the investors that had piled in to short the currency started to unwind their bets, leading...