Nikkei share average: Japan's Nikkei share average experienced a decline on Tuesday as investors anticipated a pivotal decision from the Bank of Japan (BOJ), marking a potential shift away from eight years of radical monetary stimulus. Semiconductor-related stocks faced notable losses, influenced by Nvidia's annual developer conference, which failed to ignite fresh momentum in the global artificial intelligence-centered chip stock rally.

The energy sector emerged as the top performer, buoyed by a 2 per cent surge in crude oil prices overnight.

The Nikkei dipped 0.8 per cent to 39,429.73 as of 0130 GMT, retracing some of Monday's 2.7 per cent gain, propelled by media reports offering insights into the upcoming BOJ policy decision.

The broader Topix index edged down 0.2 per cent, with growth shares slipping 0.5 per cent, while value stocks remained stable.

Kazuo Kamitani, an equities strategist at Nomura Securities, remarked, "With every media outlet basically reporting an end to negative rates, yield curve control, and ETF buying - what you could call the full set of three - the market has already completely priced in this outcome." He pointed out that the updated dot plot from the US Federal Reserve's policy meeting on Wednesday would be a near-term focal point, noting that Japanese markets would be closed due to a national holiday.

The timing of the BOJ's policy announcement remains unspecified, typically coinciding with the reopening of stock markets from the midday recess at 0330 GMT.

Top BOJ officials, including Governor Kazuo Ueda, reiterated that bond purchases would persist even if yield curve control ceased and assured that the central bank would not engage in successive rate hikes post-negative rates exit.

Chip-testing equipment maker Advantest, a supplier to Nvidia, witnessed a decline of 2.5 per cent, ranking among the Nikkei's worst performers. SoftBank Group, an investor in AI-focused startups, also dipped by 0.7 per cent.

The leading detractor on the Nikkei was Fast Retailing, the operator of Uniqlo stores, due to its substantial weighting in the index, with shares sliding by 1.8 per cent.

In the energy sector, Inpex emerged as the top performer on the Nikkei, posting a gain of 2.3 per cent. Within top sectors, miners, including oil explorers, advanced by 2.2 per cent, while oil and coal producers rose by 1.2 per cent.

(With Reuters inputs.)