Japan's Nikkei falls as AI-related shares track US peers lower

TOKYO: Japan’s Nikkei share average fell on Thursday, dragged lower by AI-related heavyweights following an overnight tech selloff on Wall Street, although losses were limited as investors scooped up beaten-down stocks.

The Nikkei was down 0.99% at 69,779.01, as of 0156 GMT, after falling more than 2.5% earlier in the session.

The broader Topix rose 0.91% to 4,048.17.

Chip-testing equipment maker Advantest lost 6%, while chip-making equipment maker Tokyo Electron fell 4.4%.

Memory chip maker Kioxia was down 9.7%.

“The market is going through a natural correction, where investors sold technology stocks to lock in profits and bought cheap stocks,” said Kouji Toda, a senior fund manager at Resona Asset Management. The Nikkei soared 37% last quarter, marking its sharpest advance in data going back to 1965.

“At the beginning of the new quarter, investors readjusted their portfolios,” Toda said.

Overnight, the three major US indexes finished slightly lower, with chipmakers dragging down the S&P 500 and Nasdaq. An index of semiconductors fell 6.3%.

Lofty valuations and big AI spending by tech companies have been a concern for some market participants.

In Japan, trading houses Mitsui & Co and Marubeni rose more than 4% each on Thursday, after a government filing showed Warren Buffett’s Berkshire Hathaway had raised its stakes in these companies.

Toyota Motor and Sony Group climbed more than 3% each.

Financial shares rose, with Tokio Marine Holdings up 5%.

Mitsubishi UFJ Financial Group rose 2.25%.

Software-related shares rose, with Nomura Research Institute up 7%.

NEC Corp advanced 5.33%.

Of the more than 1,500 stocks trading on the Tokyo Stock Exchange’s prime market, 86% rose and 13% fell.