Japan's Nikkei 225 share average fell 0.99% to 69,779.01 on Thursday, weighed down by a broad-based retreat in technology shares.
The decline was driven primarily by AI-related heavyweights, which tracked lower following an overnight selloff among their US peers.
The move marks a continuation of the broader pullback in Asian equity markets, where investor confidence in artificial intelligence stocks continues to erode.
The selling pressure underscores the growing correlation between Japanese tech valuations and US market sentiment.
As global investors reassess the near-term growth prospects of AI infrastructure and software plays, Japanese exporters and semiconductor firms have faced renewed headwinds.
The benchmark's drop follows a choppy trading session earlier in the week, which ended an eight-session winning streak that had previously propelled the index to new record highs.