Nikkei slides on tech, resource sell-off despite weaker yen

TOKYO: Japan’s Nikkei share average declined on Monday as a slump in technology and resource stocks outweighed early gains driven by a weaker yen.

The benchmark Nikkei 225 Index slipped 0.6% to 52,989.99.

The broader Topix slid 0.3% to 3,554.78.

The Nikkei climbed 1.7% in early trading, supported by a decline in the yen that helped exporters and an election poll suggesting a possible landslide victory for the party of fiscally dovish Prime Minister Sanae Takaichi.

The momentum, however, changed as artificial intelligence-related shares extended declines, following a drop by AI bellwether Nvidia on Friday on reports it was reconsidering a $100 billion investment in OpenAI. Japanese resource shares fell along with a plunge in prices for gold and silver.

US President Donald Trump’s pick of Kevin Warsh as the next head of the Federal Reserve has sparked a rebound in the dollar and a drop in precious metals on expectations he will favour a smaller balance sheet.

“Regarding these massive investments and capital flows into AI infrastructure, there may be signs of a gradual shift towards more realistic assessments,” said Takahisa Odaka, a senior strategist at Nomura Securities.

“The market views (Warsh) as hawkish, particularly regarding the risk that the Fed might accelerate shifting its balance sheet from expansion to contraction.”

There were 123 advancers in the Nikkei index against 100 decliners. The largest losers were semiconductor inspection equipment maker Lasertec, down 12%, followed by Sumitomo Metal Mining Co Ltd, which sank 11.7%.

The largest percentage gainers were Hino Motors, up 7.5%, followed by drugmaker Daiichi Sankyo Co Ltd, which climbed 4.7%.