Japan's Nikkei slumps as AI leaders raise safety concerns; Topix gains

Tokyo's Nikkei share gauge experienced a significant decline on Monday, primarily due to the actions of top AI companies. The benchmark Nikkei 225 index dropped 1.61% to 62,979.17 in early trading, while the broader Topix index rose by 0.40% to 4,044.29. OpenAI CEO Sam Altman expressed his company's decision not to go public in 2026, citing safety concerns over the rapid advancement of AI technology and its potential risks to humanity.

Similarly, Anthropic CEO Dario Amodei urged AI companies to adopt a more cautious approach to development.

Market participants are closely monitoring central bank meetings this week, with both the Federal Reserve and Bank of Japan expected to raise interest rates as inflation continues to be a concern. The Middle East crisis also had a negative impact on sentiment, following the postponement of a meeting between Iran and Gulf states due to new Houthi attacks on Saudi Arabia and reports of an attack on a vessel.

Takayuki Miyajima, a senior economist at Sony Financial Group, noted that selling pressure is likely to affect AI and semiconductor-related stocks in Tokyo following several recent comments from AI leaders calling for a slowdown in the pace of AI development. The Nikkei index showed generally positive breadth, with 160 stocks advancing against 64 decliners.

However, the heavy weight of technology companies in the index dragged it lower. SoftBank Group suffered the largest loss, falling 11.73%, followed by Resonac Holdings, down 8.95%, and Taiyo Yuden, which dropped 7.85%. On the positive side, NEC rose 6.26%, Nomura Research Institute increased 6.08%, and Recruit Holdings gained 5.87%.