Nikkei drops 3.6% as chip stocks Advantest and Tokyo Electron slide 7-9%. The Philadelphia semiconductor index is 21% below its June peak. KOSPI sinks 7%.
Japan's Nikkei share average fell more than 3% on Tuesday, pulled down by heavy selling in semiconductor stocks after the Philadelphia semiconductor index slid another 2.2% overnight. The benchmark dropped 3.59% to 62,599.14 by 0034 GMT, its lowest level in a month.
Chip-testing equipment maker Advantest lost 7.52% and Tokyo Electron gave up 8.84%. The Philadelphia semiconductor index has fallen 21% from its June 22 record close, though it remains up 63% for the year.
"This is not a broad selloff, or the market is not on the risk-off sentiment," said Daisuke Hashizume, senior strategist at Daiwa Securities. "Investors are cautious about buying stocks before earnings of big tech firms in the U.S. and Japan."
Nvidia fell 4.9% overnight, extending pressure on the sector ahead of earnings from major U.S. and Japanese technology companies. South Korea's KOSPI tumbled 7% in early trade, deepening the regional selloff.
Bank shares that had rallied on expectations of an early Bank of Japan rate hike also fell. Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group each shed roughly 3%.
The broader Topix index was down 2.44% at 3,966.87. On the Tokyo Stock Exchange's prime market, 31% of stocks rose, 64% fell and 3% traded flat.
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