By Junko Fujita
Japan's Nikkei share average fell on Thursday, dragged lower by AI-related heavyweights following an overnight tech selloff on Wall Street, although losses were limited as investors scooped up beaten-down stocks.
The Nikkei TVC:NI225 was down 0.99% at 69,779.01, as of 0156 GMT, after falling more than 2.5% earlier in the session. The broader Topix TSE:TOPIX rose 0.91% to 4,048.17.
Chip-testing equipment maker Advantest TSE:6857 lost 6%, while chip-making equipment maker Tokyo Electron TSE:8035 fell 4.4%. Memory chip maker Kioxia TSE:285A was down 9.7%.
"The market is going through a natural correction, where investors sold technology stocks to lock in profits and bought cheap stocks," said Kouji Toda, a senior fund manager at Resona Asset Management.
The Nikkei soared 37% last quarter, marking its sharpest advance in data going back to 1965.
"At the beginning of the new quarter, investors readjusted their portfolios," Toda said.
Overnight, the three major U.S. indexes finished slightly lower, with chipmakers dragging down the S&P 500 and Nasdaq. An index of semiconductors NASDAQ:SOX fell 6.3%.
Lofty valuations and big AI spending by tech companies have been a concern for some market participants.
In Japan, trading houses Mitsui & Co TSE:8031 and Marubeni TSE:8002 rose more than 4% each on Thursday, after a government filing showed Warren Buffett's Berkshire Hathaway NYSE:BRK.A had raised its stakes in these companies.
Toyota Motor TSE:7203 and Sony Group TSE:6758 climbed more than 3% each.
Financial shares rose, with Tokio Marine Holdings TSE:8766 up 5%. Mitsubishi UFJ Financial Group TSE:8306 rose 2.25%.
Software-related shares rose, with Nomura Research Institute TSE:4307 up 7%. NEC Corp TSE:6701 advanced 5.33%.
Of the more than 1,500 stocks trading on the Tokyo Stock Exchange's prime market, 86% rose and 13% fell.