Japan’s Nikkei falls 1% as AI stocks slip ahead of US jobs data

TOKYO: Japan’s Nikkei share average dropped more than 1% on Tuesday, weighed down by declines in chip and other artificial intelligence-linked stocks ahead of crucial US employment data later in the day.

The Nikkei was down 1.3% at 49,510.60, as of 0215 GMT, sliding below the psychological 50,000 mark. The broader Topix Index was down 1.2% at 3,391.23.

Shares of Yaskawa Electric, a robotics company developing “physical AI”, slumped 6.1%, while data-center cable maker Fujikura slipped 5.6%, making them the biggest percentage decliners in the Nikkei. Chipmaker Renesas lost 3.6%, and silicon processor Shin-Etsu Chemical sank 3.9%.

Some of Japan’s largest tech stocks saw smaller declines after sharp losses on Monday.

AI-focused investor SoftBank Group fell 1.1%, rebounding from an earlier drop of up to 4.5%, following a 6% tumble in the previous session.

Chip-testing tool maker Advantest, an Nvidia supplier, was down just 0.3%, following a 6.6% plunge on Monday. “After yesterday’s big declines, some of the big names are attracting dip buyers,” said Maki Sawada, an equities strategist at Nomura Securities.

At the same time, “today’s decline is broader,” and ahead of risk events including the US nonfarm payrolls release on Tuesday and the Bank of Japan policy decision on Friday, “a wait-and-see posture is taking hold” in the market, she said.

Of the Nikkei’s 225 components, 187 fell versus 38 that rose.

Among the Tokyo Stock Exchange’s 33 industry groups, only airlines and agriculture sectors traded in the green.