Japan's Nikkei closes at three-month low as tech shares drag

Updates for market close

By Brigid Riley

TOKYO, Feb 25 (Reuters) - Japan's Nikkei share average closed at its lowest in three months on Tuesday as major technology shares tracked Wall Street losses overnight and on weaker sentiment amid speculation that the U.S. could toughen semiconductor restrictions on China.

The Nikkei .N225 finished down 1.4% at 38,237.79, its lowest closing level since November 29, while the broader Topix .TOPX was 0.4% lower at 2,724.7.

The tech-heavy Nasdaq closed down more than 1% on Monday, as investors worried about demand for tech supporting artificial intelligence while they waited for results from market heavyweight Nvidia NVDA.O. .N

Meanwhile, Bloomberg News reported on Tuesday that U.S. officials recently met with their Japanese and Dutch counterparts about restricting Tokyo Electron 8035.T and ASML ASML.AS engineers from maintaining semiconductor gear in China as the U.S. looks to limit China's technological prowess.

Japan's Tokyo Electron declined 4.9% and peer Advantest 6857.T, which counts Nvidia among its customers, shed 6.5%.

The yen did little to help boost shares after the Japanese currency touched its strongest level against the dollar since early December the previous day, although the dollar was a bit firmer on Tuesday at 149.81 yen JPY=EBS.

Elsewhere, Itochu 8001.T, Marubeni 8002.T, Mitsubishi Corp 8058.T, Mitsui 8031.T and Sumitomo Corp 8053.T surged after Warren Buffett said on Saturday that his conglomerate Berkshire Hathaway BRKa.N will likely increase its ownership in the five Japanese trading houses.

While Buffett's remarks have bolstered the trading firms, it's unlikely to impact overall sentiment on Japan's stock market, said James Halse, managing director of Sydney-based Senjin Capital.

"The world had its 'Buffett-thinks-Japan-is-great' moment with coverage of his visit in 2023. A modest increase in his trading company holding is unlikely to see a repeat of that," he said.

Among other major shares, Uniqlo parent firm Fast Retailing 9983.T gave up 3% and AI-focused startup investor SoftBank Group 9984.T fell 4.3%, while automaker Toyota Motor 7203.T edged up 0.2%.