Why is Nidec stock plunging today?

Nidec Corp's stock plummeted 17.6% to ¥2,340 on Monday, reaching the maximum daily downside limit on the Tokyo Stock Exchange. This dramatic drop was triggered by a report from Japanese financial outlet Diamond Online alleging that the global leader in precision motors plans to retroactively record a staggering impairment charge of approximately ¥1 trillion ($6.3 billion) for the fiscal year that ended in March 2026.

The immense charge has the potential to wipe out all profits the company has earned over the past ten years.

Adding to the shock, Nidec's board met in an emergency session on September 25 and decided to remove President and CEO Mitsuya Kishida. The announcement of new leadership could come as early as September 29. This abrupt leadership change was widely perceived as a manifestation of the gravity of management accountability concerns stemming from the accounting scandal. The scandal has already attracted the attention of shareholders who are demanding legal action against the company.

The abrupt decline in Nidec's stock stands in stark contrast to the overall performance of the Japanese market, which was trading around 0.8% higher on the day. This positive movement was driven by technology and financial stocks. The combination of the vastly expanded impairment estimate - four times the initially disclosed ¥250 billion - and the sudden removal of the CEO during an active corporate rehabilitation effort has created a severe credibility crisis for Nidec.

With the company's annual securities report due by September 30 and a subsequent earnings release slated for late October, investors are now preparing for additional disclosures that could reshape the financial outlook of one of Japan's most prominent industrial companies.