Japan's Nikkei wobbles as AI stock selloff, rising bond yields weigh

Japan's Nikkei slipped 0.2 per cent to 66,173.86 in early Tokyo trade on Tuesday, according to Business Recorder, as investors pulled money from big technology names. Government bond yields in Japan and the United States both climbed to fresh highs, lifting expectations of tighter monetary policy from the Bank of Japan and the Federal Reserve. Oil prices stayed elevated amid lingering Middle East uncertainty, while the broader Topix gained 0.5 per cent to 4,178.62.

AI-linked shares led the losses, with Tokyo Electron and Advantest sliding 3.4 per cent and 1.6 per cent. Cable makers Furukawa Electric and Fujikura fell 4.9 per cent and 3.9 per cent, while Sumco dropped 4.1 per cent. On the upside, Toyota and Nissan each gained 3.1 per cent, and Tokyo Electric Power led the advancers with a 5.1 per cent rise.

Nomura Securities strategist Wataru Akiyama called the move a rotation that is probably short-lived, with auto stocks among the gainers. He still regards the wider Japanese market trend as intact. Across the index, 168 of 225 components advanced, 54 declined and three finished unchanged.