Tokyo’s Nikkei 225 index declined by 1.8% on Tuesday, closing at 38,474 as investors sold semiconductor-related stocks.

This drop followed a slump in the Nasdaq in New York, prompted by the Biden administration’s proposal for new restrictions on exporting advanced semiconductors used in AI.

The Japanese market reopened after a three-day break, facing pressure on semiconductor shares due to the United States policy news.

Additionally, the yield on 10-year Japanese government bonds briefly climbed to 1.25%, its highest level in nearly 14 years, reflecting similar trends in the US Treasury market.