Japanese equities opened lower in early trading, with technology and semiconductor-related shares leading the market decline.

Strategists from Bank of America Securities Japan noted in a recent report that the profitability of AI investments remains a risk factor requiring continued monitoring. They added that the fundamental trajectory of the U.S. employment market also needs to be assessed.

Among the worst-performing constituents of the benchmark index, Kioxia Holdings Corp. fell 6.2%, while Lasertec Corp. dropped 5.2% and Sumco Corp. declined 4.4%.

The U.S. dollar was trading at 162.12 yen, compared to 162.09 yen at the close of the New York market on Monday.

The Nikkei 225 index fell 0.5% to 69,386.29 points.