Nikkei wavers as AI stocks weigh ahead of Nvidia earnings

Japan's Nikkei share average experienced a mixed performance on Monday, August 24, with artificial intelligence-related stocks facing pressure ahead of Nvidia's earnings announcement. The market was further weighed down by inflation concerns and uncertainty in the Middle East, with expectations of a Bank of Japan interest rate hike in September.

The Nikkei rose by 0.2% to 65,900.95 at 0156 GMT, after fluctuating between gains of up to 0.4% and losses of 0.5%. Most AI-related shares, which significantly influence the Nikkei, saw declines, with Fujikura falling 3.5% and SoftBank Group dropping 3.3%. Chip manufacturers, however, led the market higher, with Tokyo Electron gaining 2.1%.

Nvidia has informed major clients that AI server prices will increase by over 15% due to rising memory costs, reported Bloomberg on Saturday. Equities strategist Wataru Akiyama from Nomura Securities views these concerns as a pretext for selling, as there is no significant change in the outlook for earnings growth in AI and semiconductor-related stocks.

However, rising bond yields due to inflation worries suggest the Japanese stock market may not sustain an upward trend.