Japanese shares concluded the trading session on Wednesday with a mixed performance, as technology stocks experienced a rally in anticipation of significant earnings reports. However, the broader market faced pressure from increasing oil prices and a depreciating yen. The Topix increased by 0.45%, finishing at 4,033.13. The blue-chip Nikkei 225 experienced an increase of up to 2.05% before losing momentum in the afternoon session, ultimately closing 0.18% lower at 66,115.60. The Philadelphia semiconductor index experienced a notable increase of 5.2% overnight, despite the ongoing escalation of the Middle East conflict, which has led to rising oil prices, alongside the announcement of new tariffs by the U.S.
Investors are closely monitoring the upcoming results from major technology companies to assess their management of increasing costs, while also drawing insights from South Korea’s technology-focused Kospi index, according to Nomura Securities strategist Maki Sawada. Sawada noted, “If these earnings trends prove favourable, they could well serve to dispel such concerns and act as a catalyst for a rise in share prices,” Sawada said. “Concerns over the impact of rising costs on corporate earnings, driven in part by the rise in crude futures prices, are weighing on the stock market as a whole.”
The yen weakened to a 40-year low of 163.24 per dollar, causing turbulence in domestic markets. Concurrently, government data revealed that Japan’s imports surged to a record high in June, driven by the currency’s depreciation and rising oil prices. Japanese government bonds experienced a decline, as the benchmark 10-year yield increased by 1.5 basis points to 2.735%, amid growing inflation and fiscal concerns. Suppliers in the tech industry and chipmakers drove the gains on the Nikkei, which recorded 122 advancers compared to 102 decliners.
The largest gainers in the index were Mitsui Kinzoku, which experienced an increase of 7.38%, followed by Taiyo Yuden, rising by 6.73%, and Kioxia Holdings, which saw a gain of 5.26%. The most significant declines were observed within the consumer sector, with J.Front Retailing experiencing a decrease of 5.75%, followed by Shiseido, which fell by 5.38%, and Takashimaya, which recorded a loss of 4.91%.