Japan's Nikkei falls more than 3% on chip selloff

Japan's Nikkei share average fell more than 3% on Tuesday, dragged down by heavy losses in chip-related stocks after their U.S. peers closed lower overnight.

The Nikkei .N225 was down 3.59% at 62,599.14 as of 0034 GMT, while the broader Topix .TOPX was lower 2.44% at 3,966.87.

"This is not a broad selloff, or the market is not on the risk-off sentiment," said Daisuke Hashizume, senior strategist at Daiwa Securities.

"Investors are cautious about buying stocks before earnings of big tech firms in the U.S. and Japan. There are uncertainties in the market."

Nvidia NVDA.O fell 4.9% overnight and the Philadelphia semiconductor index .SOX extended its recent selloff, falling 2.2%. The index is down 21% from its record-high close on June 22, but up 63% in 2026.

South Korea's benchmark KOSPI .KS11 was down 7% in early trade on Tuesday.

The Nikkei's moves have been heavily influenced by the tech-heavy KOSPI and the U.S. Philadelphia semiconductor index.

Chip-related Advantest 6857.T and Tokyo Electron 8035.T fell 7.52% and 8.84%, respectively.

Bank shares, which had been rising on prospects of an early Bank of Japan interest rate hike, also fell, with Mitsubishi UFJ Financial Group 8306.T and Sumitomo Mitsui Financial Group 8316.T losing nearly 3% each.

Of the more than 1,500 stocks trading on the Tokyo Stock Exchange's prime market, 31% rose, 64% fell and 3% traded flat.