Nikkei slides on US tech selloff, oil-driven rate fears

By Rocky Swift

TOKYO, Oct 19 (Reuters) - Japan's Nikkei share average tumbled on Monday as a selloff in US technology stocks and rising oil prices fuelled concerns about inflation and higher interest rates.

The benchmark Nikkei 225 .N225 fell 2.05% to 63,984.45 in early trading. The broader Topix .TOPX slipped 1.22% to 4,016.34.

The decline in Japanese equities followed a weak session on Wall Street on Friday, weighed down by losses in AI- and chip-related stocks. A more than 3% jump in oil prices also added to inflationary concerns, which have been a key driver of market volatility amid expectations of further monetary tightening by central banks.

Bank of Japan Governor Kazuo Ueda said on Monday that underlying inflation is "quite close" to the central bank's 2% target, heightening the importance of anchoring inflation around that level.

"While chip-related stocks drag the index down, buying of value and defensive stocks should underpin the market," Yuta Okamoto, market analyst at Tokai Tokyo Intelligence Laboratory, wrote in a note.

There were 78 advancers in the Nikkei 225 against 147 decliners, with no stocks unchanged.

The largest losers were Taiyo Yuden 6976.T, down 7.42%, followed by Sumitomo Electric Ind. 5802.T, 5.96% lower, and Sumco 3436.T, which lost 5.88%.

The largest percentage gainers in the index were Toho 9602.T, up 3.64%, followed by Baycurrent 6532.T, 2.80% higher, and Aeon 8267.T, which gained 2.14%.