Japan's Nikkei falls as tech shares track US peers lower
As of 0215 GMT, the Nikkei dropped 0.5 per cent to 42,689.22. The index is headed for a third straight session of decline, slipping from record highs hit earlier this week.
The broader Topix slipped 0.42 per cent to 3,085.78.
"Investors kept selling stocks to book profits, but some investors who were not able to buy shares during the rally picked up stocks on the dip... (which) capped the Nikkei's losses," Shinkin Asset Management's senior fund manager Naoki Fujiwara said.
Chip-making equipment maker Tokyo Electron fell 2 per cent and technology investor SoftBank Group lost 2.05 per cent.
On Wall Street, the Nasdaq and S&P 500 fell overnight as investors sold tech stocks and moved into less highly valued sectors.
Drugmaker Daiichi Sankyo lost 5.75 per cent to become the worst performer among the 225 stocks on the Nikkei.
Bucking the trend, shares of chip-testing equipment maker Advantest rose 1.95 per cent, rebounding from a 5.6 per cent loss on Wednesday.
Cable makers, considered a gauge for demand for data centres, rose, with Furukawa Electric and Fujikura gaining 1.54 per cent and 1.28 per cent, respectively.
The market awaited remarks from Federal Reserve Chair Jerome Powell, who is expected to speak on Friday at the Fed's annual conference in Jackson Hole, Wyoming, for policy signals.
Investors have been pricing in a 25-basis-point rate cut in September, according to data compiled by LSEG.
Shinkin Asset's Fujiwara said the market already priced Powell's dovish comments, so remarks that are in line with expectations may trigger a sell-off in local stocks next week.
"For the Nikkei to rise further, the market needs to confirm the Fed's rate cut in September, and the fate of Japanese politics and Japanese corporate outlook for the second half of the year," Fujiwara said.
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