TOKYO: Japan’s Nikkei share average fell on Wednesday, tracking overnight Wall Street declines after a batch of upbeat US economic data raised concerns that sticky inflation could slow the Federal Reserve’s pace of monetary easing.

The Nikkei index declined 0.6% to 39,843.84, as of 0153 GMT, with 163 of its 225 components falling, 60 rising and two trading flat.

The broader Topix index slid 0.75%, with growth shares dropping 0.92%, compared with a 0.57% slide for value shares The US S&P 500 sank 1.1% on Tuesday, after a report showed services sector activity accelerated in December, with a measure tracking input prices surging to a nearly two-year high.

Interest rate-sensitive tech shares slid, with the tech-heavy Nasdaq index dropping 1.9%.

Chip shares initially fell in Tokyo, but many rebounded over the course of the morning, with Nomura strategist Kazuo Kamitani pointing to Nvidia’s presentation at CES overnight for generating new buzz for the sector.

“In the end, expectations for AI, chips and everything of that sort continue to be high,” he said.

Japan’s Nikkei rises as tech shares gain

He also flagged the psychological line at 39,500 as a support for the Nikkei.

Nvidia-supplier Advantest rose 1.5% and chip-making equipment giant Tokyo Electron gained 1.7%, after both shares began the day lower.

Carmakers were overall supported by a weaker yen, which continued to hover near 6-month lows.

A weak local currency boosts the value of overseas revenues.

Toyota gained 0.8%, while Subaru and Mazda, which are highly dependent on US sales, climbed 1.1% and 0.7%, respectively.

Uniqlo store operator Fast Retailing slumped 1.3%, ahead of its earnings presentation on Thursday.