(Recasts to reflect change in market direction, updates prices)
By Rocky Swift
TOKYO, Feb 2 (Reuters) - Japan's Nikkei share average
declined on Monday as a slump in technology and resource stocks
outweighed early gains driven by a weaker yen.
The benchmark Nikkei 225 Index slipped 0.6% to
52,989.99. The broader Topix slid 0.3% to 3,554.78.
The Nikkei climbed 1.7% in early trading, supported by a
decline in the yen that helped exporters and an election poll
suggesting a possible landslide victory for the party of
fiscally dovish Prime Minister Sanae Takaichi.
The momentum, however, changed as artificial
intelligence-related shares extended declines, following a drop
by AI bellwether Nvidia on Friday on reports it was
reconsidering a $100 billion investment in OpenAI.
Japanese resource shares fell along with a plunge in prices
for gold and silver. U.S. President Donald Trump's pick of Kevin
Warsh as the next head of the Federal Reserve has sparked a
rebound in the dollar and a drop in precious metals on
expectations he will favour a smaller balance sheet.
"Regarding these massive investments and capital flows into
AI infrastructure, there may be signs of a gradual shift towards
more realistic assessments," said Takahisa Odaka, a senior
strategist at Nomura Securities. "The market views (Warsh) as
hawkish, particularly regarding the risk that the Fed might
accelerate shifting its balance sheet from expansion to
contraction."
There were 123 advancers in the Nikkei index against 100
decliners. The largest losers were semiconductor inspection
equipment maker Lasertec ( LSRCF ), down 12%, followed by
Sumitomo Metal Mining Co Ltd, which sank 11.7%.
The largest percentage gainers were Hino Motors ( HINOF ), up
7.5%, followed by drugmaker Daiichi Sankyo Co Ltd ( DSKYF ),
which climbed 4.7%.