Key facts
- Nikkei share average dropped 2.8% as of 2003 GMT.
- Advantest and Tokyo Electron were among the biggest decliners.
- Concerns over AI investment profitability weighed on share prices.
- Game maker Konami was the Nikkei's biggest percentage gainer.
Japan's Nikkei share average slumped as much as 3% on Friday, with chip-related stocks leading the decline amid growing concerns about the sustainability of spending on artificial intelligence. The market followed losses on Wall Street, exacerbated by disappointing late earnings from Amazon.com and Intel, which showed significant cash burn. Equities strategist Maki Sawada of Nomura Securities noted that this reflects increasing worries over the profitability of AI investments. The Nikkei was down 2.8% as of 2003 GMT, with Advantest and Tokyo Electron among the biggest decliners. The broader Topix index saw a milder decline of 1.3%. Falling crude oil prices, influenced by optimism over Middle East peace talks, provided some support. The Bank of Japan is expected to announce its policy decision later on Friday, with no change in interest rates anticipated, though investors will scrutinize signals regarding a potential December hike.