TOKYO: Japan’s Nikkei share average dipped in morning trade on Tuesday, as domestic technology shares followed declines on Wall Street to drag on the index, while a pause in the yen’s push higher supported buybacks of export-related shares.

The Nikkei was down 0.1% at 38,055.62 by the midday break, while the broader Topix rose 0.3% to 2,669.84. The S&P 500 finished lower on Monday, with AI heavyweight Nvidia dipping ahead of its quarterly report this week.

The tech-heavy Nasdaq also declined.

Japanese technology shares tracked their US peers lower, with chip-related majors Tokyo Electron and Advantest, which counts Nvidia among its customers, dragging the overall Nikkei.

The shares fell 2.5% and 2.1%, respectively. Investors were taking a wait-and-see approach ahead of chip star Nvidia’s earnings report on Wednesday, said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management.

Nvidia has been at the center of market enthusiasm for artificial intelligence, and there is pressure on the firm to pull out stellar results.

“We’re in a situation where the bar has risen,” Ichikawa said, adding that if Nvidia’s earnings come in as expected, there might be some brief selling of tech shares.

Technology shares saw the biggest percentage losses, with Lasertec Corp down 4.7%, followed by Disco Corp losing 3.1% and Hitachi down 2.8%.

Japan’s Nikkei falls as yen firms, chip-related shares top losers

However, the yen’s climb higher against the dollar stalled on Tuesday, prompting investors to buy back export-related stocks that took a hit in the previous session as the yen touched a three-week high of 143.45. Sony Group was up 1.7%, Honda Motor gained 1.4%, and Toyota Motor rose 1%.

The yen’s pause helped lift the broader Topix index into positive territory, while limiting losses on the Nikkei.

Among the Tokyo Stock Exchange’s 33 industry sectors, mining rallied 2% and oil and coal rose nearly 1% after oil prices surged overnight on concerns of possible supply disruptions.