Nvidia Earnings Loom Large as Nikkei Fluctuates Amid Inflation Worries

The Nikkei share average in Japan fluctuated on Monday due to pressure from artificial intelligence-related shares ahead of Nvidia's earnings announcement. The market was also influenced by inflation concerns and uncertainty in the Middle East, leading investors to expect the Bank of Japan to raise interest rates in September.

Japanese government bond yields rose during morning trading, while most AI-related shares declined. Fujikura lost 3.5% and SoftBank Group slipped 3.3%. However, chip-making tool manufacturers performed well, with Tokyo Electron rising 2.1%.

Nvidia has notified its largest customers that AI server prices will increase by more than 15% due to soaring memory costs. Wataru Akiyama, an equities strategist at Nomura Securities, views concerns over the profitability of semiconductor-related companies as a pretext for selling after a significant build-up of open positions in margin trading.