Japan's Nikkei tumbles as tech stocks hammered on US rate hike worries

By Reuters News

TOKYO, Oct 15 (Reuters) - Japan's Nikkei share average slumped in early trading on Thursday, with tech stocks hit hard after hot US inflation figures sparked fears of higher interest rates.

The tech-heavy Nikkei .N225 dropped 3.5% as of 0021 GMT, while the broader Topix .TOPX fell 1.9%.

Overnight, a hotter-than-expected US CPI reading stoked bets that the Federal Reserve will need to raise rates earlier and keep them elevated longer, taking a toll on the highly leveraged tech sector. The US Nasdaq Composite .IXIC slumped 1.9% on Wednesday.

In Japan, AI-linked stocks led losses, with chip equipment makers Advantest 6857.T and Tokyo Electron 8035.T drooping 7.3% and 5.8%, respectively. AI-focused startup investor SoftBank Group 9984.T tumbled 7.9%.

Of the Nikkei's 225 components, 151 fell versus 73 that rose, with one flat.

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