Japan's Nikkei slides as valuation concerns mount before tech results

Meta Platforms

Mon 07:53

Updates with closing levels and fresh comment
By Rocky Swift
TOKYO, Oct 19 (Reuters) - Japan's Nikkei share average fell on Monday as valuation concerns in the technology sector lingered ahead of key results this week.
The benchmark Nikkei 225 .N225 slid 0.62% to close at 64,916.70, trimming an earlier decline of more than 2%. The broader Topix .TOPX edged 0.04% higher to 4,067.48.
The decline in Japanese equities followed a weak session on Wall Street on Friday, weighed down by losses in AI- and chip-related stocks. A surge in oil prices last week added to inflationary concerns and expectations of further monetary policy tightening by central banks.
Bank of Japan Governor Kazuo Ueda said on Monday that underlying inflation is "quite close" to the central bank's 2% target, heightening the importance of anchoring inflation around that level.
Investors are looking for reassurance in results this week from AI heavyweights like Meta Platforms META.O in the US and tech suppliers like Disco 6146.T in Japan, said Maki Sawada, an equities strategist at Nomura Securities.
"It seems we are seeing a sort of sector rotation, with capital flowing from AI and semiconductors into consumer and defensive sectors," Sawada added. 
"There is a great deal of focus on whether corporate earnings will be able to dispel the market’s concerns regarding AI-related investments." 
There were 111 advancers on the Nikkei 225 against 108 decliners and 6 unchanged stocks.
The largest losers were Taiyo Yuden 6976.T, down 4.85%, followed by Trend Micro 4704.T, which closed 4.21% lower, and Mercari 4385.T, which lost 3.95%.
The largest percentage gainers in the index were movie studio Toho 9602.T, up 7.04% in its biggest one-day gain since July 2025. It was followed by software testing provider Shift 3697.T closing 5.48% higher and consulting services provider Baycurrent 6532.T, which gained 5.35% to a record closing level.

 (Reporting by Rocky Swift in Tokyo; Editing by Sherry Jacob-Phillips and Ronojoy Mazumdar)
 ((rocky.swift@thomsonreuters.com;))