Japan’s Nikkei share average concluded the trading session nearly flat on Thursday, as investors evaluated the latest developments in the Middle East, recovering from earlier losses following Washington’s confirmation that its overnight strikes on Iran had come to an end. The Nikkei closed 0.06% higher at 64,217.27, recovering from an early selloff of nearly 3%. However, market breadth remained weak, with many stocks in negative territory. The broader Topix slid 0.45% to 3,830.35. “There still appears to be a lack of drivers strong enough to attract meaningful fresh inflows, and investors remain somewhat cautious, suggesting the market is not yet ready for a decisive move higher, even if some buying has started to appear,” said Naoto Takahashi.
Market sentiment improved following the U.S. announcement regarding the completion of its strikes in Iran, which occurred shortly after U.S. President Donald Trump issued a warning of additional attacks should a peace agreement fail to materialise. “… After the U.S. military declared early on that its attack had ended, investors took it as a signal urging Iran to move quickly toward an agreement,” stated Shuji Hosoi. “That fostered the perspective that even military action was being utilised as leverage in the pursuit of a negotiated settlement, fuelling speculation that an agreement with Iran may be imminent.”
AI-related shares, which had previously exerted downward pressure on the Nikkei, managed to reduce some of their losses as the session progressed. Tech investment conglomerate SoftBank Group experienced a decline of 1.4%, having previously dropped as much as 7.5%. Fujikura 5803, a producer of optical fibre utilised in AI data centres, experienced a decline of 1.2%, having previously fallen by as much as 7.3% earlier in the trading session. Semiconductor testing equipment manufacturer Advantest 6857 experienced a decline of 0.2%.
On the Nikkei, 142 stocks declined while 81 experienced gains. Defying the broader downturn, printing firm TOPPAN Holdings emerged as the top performer among the blue-chip stocks, rising 15.7%, the biggest percentage gain since October 2008. It was followed by seasonings maker Ajinomoto, which saw an increase of 7.5%, and memory-chip manufacturer Kioxia, which experienced a gain of 7%.