TOKYO: Japan’s Nikkei share average reversed early gains on Friday to close the morning session lower, as the yen strengthened and losses for tech shares deepened.

The Japanese currency had gained about 0.5% against the dollar by 0230 GMT, as Bank of Japan Governor Kazuo Ueda reaffirmed his willingness to continue raising interest rates in a testimony to parliament.

The stronger yen exacerbated early losses in chip shares, which had been tracking overnight declines in Wall Street peers.

A firmer yen reduces exporters’ competitiveness.

The Nikkei was down 0.24% to 38,117.44 after gaining as much as 0.42% earlier in the day. The broader Topix sagged 0.15%.

A sub-index of growth shares lost 0.23%, compared with just a 0.06% decline for value stocks.

The yen last traded at 145.62 per dollar, reversing course from Thursday when it weakened as far as 146.53. Ueda’s testimony continues in the afternoon, and traders will also be wary of US Federal Reserve Chair Jerome Powell’s keynote speech at the annual Jackson Hole symposium later in the day, long after Japanese markets close for the week.

“If the Nikkei breaks below 38,000 today, it could trigger a much steeper drop,” said Kazuo Kamitani, an equities strategist at Nomura Securities.

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“If the yen gets close to 145 per dollar, it could feed into Nikkei losses,” he added.

“Careful attention is needed.”

Sector-wise, tech was by far the Nikkei’s biggest drag. Chip-making machinery giant Tokyo Electron lost 2.72% to be the biggest decliner in index-point terms.

Chip-testing equipment manufacturer Lasertec slumped 3.83% to be the biggest percentage decliner.

Peer Advantest dropped 3.53%.

At the other end, electronics makers Sharp Corp was the Nikkei’s biggest percentage gainer, jumping more than 6% following a report that SoftBank Corp was in talks to make a 100 billion yen