Nikkei slides on US tech selloff, oil-driven rate fears By Rocky Swift

Tokyo witnessed a significant decline in the Nikkei share average on Monday, as a sharp decrease in US technology stocks and surging oil prices heightened fears of inflation and potential interest rate hikes. The benchmark Nikkei 225 index fell 2.05% to 63,984.45 in early trading, while the broader Topix index declined 1.22% to 4,016.34.

The downturn in Japanese equities followed a weak performance on Wall Street on Friday, triggered by losses in AI and chip-related companies. Additionally, a staggering 3% surge in oil prices further exacerbated inflationary concerns, which have been a significant catalyst for market volatility as central banks prepare for additional monetary tightening measures.

Bank of Japan Governor Kazuo Ueda stated on Monday that underlying inflation is "quite close" to the central bank's 2% target, emphasizing the necessity to maintain inflation around that level. To counteract the market decline, Yuta Okamoto, a market analyst at Tokai Tokyo Intelligence Laboratory, suggested that investors should focus on buying value and defensive stocks.

The Nikkei 225 index had 78 stocks that rose and 147 that fell, with no stocks remaining unchanged. Taiyo Yuden led the losers with a decline of 7.42%, followed by Sumitomo Electric Industries, which dropped 5.96%, and Sumco, which fell 5.88%. On the upside, Toho emerged as the biggest gainer, up 3.64%, with Baycurrent, up 2.80%, and Aeon, which rose 2.14%, also among the top gainers.