Japan's Nikkei rises as SoftBank rebounds from AI-led selloff

Japan’s Nikkei share average experienced a rise on Tuesday as technology investor SoftBank Group rebounded from a significant selloff the previous day, according to wire material. The market's recovery was driven by traders reassessing comments from executives in US artificial intelligence companies regarding a potential slowdown in AI development. The Nikkei recouped early losses and rose approximately 1% to 64,082.36 by the midday break, while the broader Topix remained relatively flat at 4,057.06.

Shares of SoftBank surged 9.13%, recovering a portion of the previous session's 10.7% decline following a sell-off in AI-linked stocks. This sell-off was triggered by warnings from industry leaders about the risks associated with AI technology. Kazuaki Shimada, chief strategist at IwaiCosmo Securities, noted that Japan was the first market to be impacted by these warnings in the previous session. He added that investors were initially hesitant to judge the pace of AI investments by hyperscalers after the morning's events.

Among the other notable gains were memory maker Kioxia, which rose 2.73%, and chip-related companies Advantest and Tokyo Electron, which saw increases of 0.8% and 0.33%, respectively. On the other hand, luxury apartment operator Leopalace21 remained untraded due to a surge in buy orders following its announcement that Hikari Tsushin, along with investment funds, would launch a 1,000-yen-per-share tender offer for the company.

Despite the positive movement in AI-related shares, the Topix experienced a slight decline as gains in these sectors helped curb demand for value stocks. Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group both saw declines, with Mitsubishi UFJ falling by 0.83% and Sumitomo Mitsui Financial Group dropping by 1.98%. Sony Group also experienced a 1.08% decrease.

In the Tokyo Stock Exchange's prime market, which comprises over 1,500 stocks, 57% rose, 38% fell, and 4% remained unchanged.