Nikkei Tumbles 3% as Global Tech Selloff Deepens

Japan's Nikkei 225 share index fell sharply on Wednesday, dropping 2.97% to 65,459.71 in early trading, as a global selloff in technology shares intensified. The broader Topix index also declined, slipping 2.72% to 4,027.56.

The downturn followed a weak session on Wall Street, where major U.S. indexes closed lower. Dimming expectations for a Middle East peace deal dampened risk appetite, while oil prices rose and government bonds fell worldwide, pushing yields sharply higher. The Philadelphia SE Semiconductor Index, a key gauge of U.S. tech stocks, plunged 5%.

Analysts at Sony Financial Group attributed the decline to rising long-term interest rates, which heightened perceptions that growth stocks were overvalued. "Declines in tech stocks, particularly in the semiconductor sector, drove the indices lower," they noted.

On the Nikkei, decliners far outpaced advancers, with 178 stocks falling against just 46 gaining and one unchanged. Chipmaker Kioxia Holdings led losses, dropping 10.25%, followed by Furukawa Electric, down 10.10%, and Pan Pacific International, which fell 9.75%. SoftBank Group, a major investor in artificial intelligence, retreated 6.47%.

Gainers were few, with Mercari rising 5.28%, Shiseido up 2.56%, and Otsuka Holdings adding 1.91%.