Asia report: Tech stocks tumble on AI fears as BoJ holds rates

(Sharecast News) - Asian stock markets were mostly lower on Friday, with technology stocks leading the declines amid renewed concerns about the scale of investment in AI, as investors digested the latest policy announcement from the Bank of Japan.

Japan's Nikkei 225 dropped 2.1% to 63,290.11, while the broader Topix declined 1%, as selling pressure hit semiconductor manufacturers and AI-linked stocks.

South Korea's Kospi fell around 3.5%, while mainland China's Shanghai Composite was down 1.4%. Hong Kong's Hang Seng bucked the regional trend, gaining 1.5%, while Australia's S&P/ASX 200 edged 0.2% higher.

Tech stocks were firmly out of favour in the aftermath of a disappointing reaction to Alphabet's latest results Stateside the previous evening, which saw shares drop as the Google parent reignited market concerns about the current scale of AI spending.

In Tokyo, semiconductor-related stocks suffered some of the heaviest losses, with Ibiden, Lasertec, Advantest and Tokyo Electron suffering steep losses, along with tech investor SoftBank and tech group Fujitsu.

In Seoul, heavyweights Samsung Electronics and SK Hynix also fell despite both reporting strong quarterly results in recent days.

One bright spark was gaming group Konami, which surged after reporting a 73% increase in first-half operating profit to JPY111.3bn from JPY64.3bn a year earlier, while revenue jumped 37% to JPY308bn. The firm also raised its full-year earnings guidance.

Theme park operator Oriental Land, which runs Tokyo Disney Resort, also impressed with its half-year results and an accompanying update to its dividend forecast.

In Japan, the BoJ left its benchmark interest rate unchanged at 1.25% following an 8-1 vote, in line with market expectations, while signalling that further increases remained possible as inflationary pressures persisted.