Japan Tech Shares Drag Nikkei to 3-Week Low as Advantest Tumbles (UPDATE 1)

Reuters

12:52 JST, September 1, 2025 (updated at 16:00JST)

TOKYO, Sept 1 (Reuters) – Japan’s Nikkei share average slumped to a three-week low on Monday as chip-sector stocks tumbled, taking cues from a technology-led sell-off on Wall Street on Friday.

The Nikkei .N225 fell 1.24% to 42,188.79 as of the close of trading, and earlier dropped more than 2% to the lowest since August 8.

The bulk of the Nikkei’s 530-index point slide was accounted for by drops in two heavyweight stocks: chip-testing equipment maker and Nvidia supplier Advantest 6857.T plunged 7.9%, or 244 points, while artificial intelligence-focused start-up investor SoftBank Group 9984.T dropped 4.8%, or 155 points.

The broader Topix .TOPX, by contrast, declined a more muted 0.39%.

“This seems to me like an exaggerated reaction to Friday’s New York market, which was basically a rebalancing of portfolios at month-end by selling all the stocks that outperformed in August,” primarily the big tech names, said Yunosuke Ikeda, head of macro research at Nomura.

Wall Street’s AI darling, Nvidia NVDA.O, slipped 3.3% on Friday, declining for a second day after earnings following Wednesday’s closing bell disappointed the market’s lofty expectations.

Nvidia shares were also weighed down by a Wall Street Journal report that China’s Alibaba 9988.HK, BABA.N had developed a new chip to compete with Nvidia’s offerings. Alibaba surged as much as 18.8% on Monday in Hong Kong.

On Friday, the Philadelphia SE Semiconductor Index .SOX dropped more than 3%.

The U.S. markets are closed on Monday for the Labor Day holiday.

Other chip shares leading the Nikkei lower in the latest session included Disco 6146.T, off 7.7%, Socionext 6526.T, down 6.3%, and Furukawa Electric 5801.T, down 5.5%.

With Advantest and SoftBank Group, those stocks made up the bottom five performers on the Nikkei.