By Brigid Riley
TOKYO, Nov 20 (Reuters) - Japan's Nikkei share average fell on Wednesday as caution set in ahead of U.S. AI darling Nvidia's results and outlook later in the day, which some fear could be below market expectation.
The Nikkei .N225 seesawed between gains and losses before closing the morning session 0.45% lower at 38,242.35, while the broader Topix .TOPX fell 0.46% to 2,697.67.
Nvidia NVDA.O, the world's most valuable company, will report its third-quarter earnings after Wall Street closes on Wednesday.
Market participants are looking forward to the results to assess demand for chips and the sustainability of the AI euphoria.
"There are some risks and fears that (Nvidia's) guidance will disappoint," Kyle Rodda, senior financial market analyst at Capital.com, said in a note.
"The critical detail is demand for chips for the next quarter."
Investors are also keeping an eye on geopolitical risks after Ukraine used U.S. ATACMS missiles to strike Russian territory on Tuesday.
In Japan, major chip-related shares edged down despite their U.S. peers rising on Tuesday to lift the Nasdaq and S&P 500..N
Tokyo Electron 8035.T fell 1.1% to weigh the most on the Nikkei, while Advantest 6857.T, which counts Nvidia among its customers, slid about 0.8%. AI-focused startup investor SoftBank Group 9984.T shed 0.3%.
Shares of Seven & I Holdings 3382.T jumped 8.4% following a report that the founding family was aiming to take the retailer private this financial year.
Tech and entertainment conglomerate Sony Group 6758.T gained 2.9%. Reuters reported on Tuesday that Sony was in talks to acquire the publishing, anime and gaming powerhouse Kadokawa Corp 9468.T. Shares of Kadokawa climbed 18.7% on Wednesday to hit the upper limit.
Among other individual stocks, Tokyo Gas 9531.T surged as much as 15% after a regulatory filing showed on Tuesday that U.S. activist investor Elliott Management had taken a 5.03% stake in the company.
(Reporting by Brigid Riley; Editing by Subhranshu Sahu)
((brigid.riley@thomsonreuters.com;))
