Asian shares began the week on a downbeat note on Monday, with most markets in the region closing lower. The weakening of the Japanese yen provided a brief boost to Japanese exporters early in the day, but this was outweighed by losses in the technology sector.

The Topix index of Japanese equities had its biggest one-day drop since October, falling over 3%. The tech sector was the biggest drag on the index, with chip stocks slumping around 4%. This mirrored the pressure on artificial intelligence (AI)-related stocks seen on Friday in the US market, where Nvidia Corp. dropped 5.6%. Analysts suggested that this sell-off was likely a continuation of the weakness seen in the US market at the end of last week.

Equities in Australia and South Korea also declined on Monday, reversing gains made over the previous three days.

The strengthening of the yen comes after the Bank of Japan (BOJ) changed its policy stance earlier this year, allowing long-term interest rates to rise. This has led to a decrease in demand for Japanese government bonds, which has in turn caused the yen to appreciate. A stronger yen can be a negative for Japanese exporters, as it makes their products more expensive for overseas buyers.

Overall, the outlook for Asian markets remains uncertain. Investors are watching closely for signs of a slowdown in global economic growth, as well as for any further policy changes from central banks around the world.