TOKYO: Japan’s Nikkei share average fell on Wednesday as caution set in ahead of US AI darling Nvidia’s results and outlook later in the day, which some fear could be below market expectation.

The Nikkei finished 0.2% lower at 38,352.34, while the broader Topix closed down 0.4% at 2,698.29.

Nvidia, the world’s most valuable company, will report its third-quarter earnings after Wall Street closes on Wednesday, a key demand test for chips and the sustainability of the AI euphoria.

Nvidia options implied an 8.5% swing for the shares in either direction following the results, according to data from options analytics service ORATS.

“Owing to the company’s massive size, (that) will influence how futures trade after Wall Street’s cash close and cause ripple effects going into the Asian open tomorrow morning,” said Kyle Rodda, senior financial market analyst at Capital.com.

In Japan, many major chip-related shares edged down despite their US peers rising on Tuesday ahead of Nvidia’s results, although losses narrowed during afternoon trade.

Tokyo Electron fell 0.6% to become the second-biggest drag on the Nikkei, behind insurance firm Tokio Marine Holdings, which fell 7%.