The Nikkei 225 index in Japan dropped 4.0% on Tuesday, closing at 62,364.92 points.

Japanese stocks experienced a sharp decline, driven by a severe sell-off in semiconductor-related shares. This follows a drop in U.S. chip stocks overnight.

“This is not a broad-based sell-off, nor is the market in a risk-off mode,” said Daisuke Hashizume, a senior strategist at Daiwa Securities. “Investors are cautious about buying stocks ahead of earnings reports from major U.S. and Japanese tech companies. There is uncertainty in the market.”