TOKYO: Japan’s Nikkei share average slumped the most in a week on Monday as a drop in technology and resource stocks outweighed early gains driven by a weaker yen.
The benchmark Nikkei 225 Index fell 1.2 percent to close at 52,655.18, while the broader Topix slid 0.85 percent to 3,536.13.
The Nikkei climbed 1.7 percent 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 USD100 billion investment in OpenAI.
Japanese resources 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.”
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