Japan's Nikkei extends weekly slide as tech shares track Wall Street declines

By Rocky Swift

TOKYO, Nov 21 (Reuters) - Japan's Nikkei share average slid sharply on Friday, dragged down by technology-related stocks, as fresh valuation concerns drove U.S. stocks lower overnight.

The Nikkei 225 Index .N225 sank 2.3% to 48,653.80, as of the midday break, poised for a 3.4% drop this week. The broader Topix .TOPX was down just 0.3%.

Overnight, Wall Street stocks slid in a sharp reversal from an early rally, as optimism faded over quarterly results from artificial intelligence bellwether Nvidia NVDA.O.

Nvidia's record profits failed to dispel worries about overextended valuations in the AI sector, and traders in Japan may also be cautious as a holiday weekend looms and new stimulus by the government stirs concerns about the nation's finances, said Nomura Securities strategist Fumika Shimizu.

The yen traded near a 10-month low and long-term Japanese government bond yields were close to record highs ahead of the release of a massive new stimulus plan expected to be funded in part by issuance of new debt.

"Concerns about Japan's fiscal deterioration and the so-called negative aspects of yen weakness are likely emerging," Shimizu said.

There were 147 advancers on the Nikkei against 77 decliners. Some of the largest losers in the index were heavyweights in the AI sector, including Advantest 6857.T, which plunged 11%, and SoftBank Group 9984.T, which sank 10%.

The largest gainers in the index were M3 2413.T, up 5.84%, followed by Olympus 7733.T which gained 4.3%.