Japan's Nikkei slides as AI stocks tumble, geopolitical risks weigh

In early trade on Tuesday, Japan's main index, the Nikkei 225, was down 2.64% at 67,206.79, and was on course for a fourth straight daily decline. Business Recorder reported that the slide deepened as a selloff in AI-related shares gathered momentum after US chip stocks weakened. The broader Topix slipped 0.56% to 4,081.76.

Overnight, the tech-heavy Nasdaq lost 0.44% as chip stocks fell on Wall Street. Uncertainty about what the Federal Reserve does next, along with Middle Eastern and Ukrainian tensions, kept traders careful. Data released on Tuesday showed Japan's September wholesale prices up 6.8% year on year, while yen-based import prices jumped 24.5%. Nomura Securities strategist Maki Sawada said markets are questioning whether large AI data-center spending will generate returns, and energy price effects from global hotspots are also tempering optimism.

Within the Topix, marine transportation posted the biggest gain at 3.35%, while nonferrous metals were the weakest group, sliding 4.79%. Of the Nikkei 225 constituents, 129 stocks rose and 96 fell, with Kioxia Holdings sinking 13.02%, Taiyo Yuden down 9.34% and Kokusai Electric shedding 9.19%. On the upside, Kawasaki Kisen Kaisha climbed 4.07%, Mitsui O.S.K. Lines rose 3.81% and was tracking toward a record high, and Pan Pacific International gained 3.36%.