Japan's Nikkei share gauge fell sharply on Monday. Technology stocks led the drop after leaders of major AI companies called for a slowdown in development.
The Nikkei 225 slid 1.61% to 62,979.17 in early trading. The broader Topix index moved in the opposite direction, gaining 0.40% to 4,044.29.
The split between the two indexes shows how deeply the selloff was tied to tech shares. The Nikkei carries a heavier weighting of tech companies than the Topix.
AI Leaders Urge Caution
OpenAI Chief Executive Sam Altman said his company will not go public in 2026. He pointed to safety concerns over how quickly AI is advancing and its possible risks to humanity.
On Saturday, Anthropic CEO Dario Amodei made similar comments. He urged AI companies to take a more careful approach to development.
Those remarks came over the weekend, just before Monday's trading session began. Investors reacted by pulling back from AI and semiconductor stocks in Tokyo.
Takayuki Miyajima, senior economist at Sony Financial Group, said the comments were behind much of the selling. He wrote in a note that pressure on AI and semiconductor shares was likely to follow the weekend statements.
Central Banks and Middle East Add Pressure
Markets are also watching central bank meetings set for this week. Both the Federal Reserve and the Bank of Japan are expected to raise rates as inflation pressures continue.
The Middle East crisis added to the cautious mood. Oman said a planned meeting between Iran and Gulf states on managing traffic through the Strait of Hormuz was postponed.
The postponement followed new Houthi strikes on Saudi Arabia. There were also reports of an attack on a vessel in the region.
Miyajima said the situation in the Middle East continues to weigh on investor sentiment. He linked it directly to the caution seen in Monday's session.
Despite the drop in the Nikkei, market breadth was mostly positive. There were 160 advancing stocks against 64 decliners.
The heavy weighting of tech firms in the index pulled the overall gauge lower even as more stocks rose than fell. This pattern is common when a handful of large companies drive an index's direction.
SoftBank Group was the biggest loser on the day, falling 11.73%. Resonac Holdings dropped 8.95%, and Taiyo Yuden fell 7.85%.
On the other side, NEC posted the largest gain, up 6.26%. Nomura Research Institute rose 6.08%, and Recruit Holdings gained 5.87%.
The mix of AI safety warnings, expected rate hikes, and Middle East tensions created a cautious backdrop for Tokyo trading. Investors are now watching this week's central bank decisions for further direction.
