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TOKYO: Japan’s Nikkei share average closed 2.5 percent lower on Wednesday, as high-flying technology stocks lost ground following sharp overnight declines on Wall Street. The Nikkei closed the session lower at 50,212.27. Earlier in the session, the index fell as much as 4.65 percent to 49,073.58, its lowest point since October 24. The broader Topix ended 1.26 percent lower at 3,268.29. “The Nikkei’s declines earlier in the day were too much, but this happens after the index rises sharply. And it was proven that investors would want to pick up stocks once the Nikkei fell below the 50,000,” said Hiroyuki Ueno, chief strategist at Sumitomo Mitsui Trust Asset Management. In October, the Nikkei crossed the crucial 50,000 mark for the first time and climbed 16.64 percent, its biggest monthly gain in 35 years, as technology shares rallied on expectations that US artificial intelligence-related firms such as chipmaker Nvidia would continue to grow. Sentiment was also buoyed by expectations of substantial government spending to spur economic growth after Sanae Takaichi became Japan’s new prime minister last month. “The index will probably see another sharp decline in the future, but will recover from the losses and keep rising slowly,” Ueno said. The Nikkei tracked US stocks’ sharp losses overnight, triggered by big banks’ warning that equity markets could be headed for a drawdown, reflecting mounting concerns over stretched valuations. Technology investor SoftBank Group tumbled 10 percent, chip-related Advantest and Tokyo Electron lost 5.95 percent and 4 percent, respectively. Together, the three companies accounted for 75 percent of the Nikkei’s 1,284-point loss on Wednesday. Shares of Nintendo jumped 6.22 percent after the game maker hiked its annual sales forecast for the Switch 2 gaming device. Uniqlo brand owner Fast Retailing climbed 2 percent and furniture and home goods retailer Nitori Holdings rose 2.3 percent.
