AI Fears Send Japan Stocks Plummeting, Tech Sector Takes Hit

Japan's Nikkei share average fell sharply on Monday due to concerns over AI development. The benchmark Nikkei 225 dropped 1.61% to 62,979.17 in early trading, while the broader Topix gained 0.40% to 4,044.29.

The decline was led by technology stocks, which have been among the major beneficiaries of the global AI investment boom. OpenAI Chief Executive Sam Altman and Anthropic Chief Executive Dario Amodei called for a more cautious approach to AI development, citing safety risks associated with rapidly advancing artificial intelligence.

SoftBank Group was the biggest decliner on the Nikkei, tumbling 11.73%, while Resonac Holdings fell 8.95% and Taiyo Yuden dropped 7.85%. On the other hand, NEC gained 6.26%, making it the index's biggest percentage gainer.

Markets are also bracing for key central bank decisions this week, with investors expecting potential rate hikes from both the U.S. Federal Reserve and the Bank of Japan as inflationary pressures remain elevated.