The Nikkei 225 Index declined by 0.93%, finishing at 65,683 on Thursday, as it retraced a portion of the gains from the prior session. This downturn was driven by renewed selling pressure on chipmakers and other technology stocks, amid ongoing apprehensions regarding the artificial intelligence sector.

The losses occurred notwithstanding a further decrease in oil prices following the agreement between Iran and Oman on the partial reopening of the Strait of Hormuz, which alleviated inflation concerns and enhanced the prospects for interest rates. Japanese companies associated with the global AI infrastructure development experienced significant downturns, with Kioxia Holdings declining by 10.2%, Taiyo Yuden by 11%, Murata Manufacturing by 5.2%, Ibiden Co by 6.5%, and Tokyo Electron by 5.5%.

SoftBank Group also declined by 4.4% in anticipation of its earnings release, which investors are optimistic will offer new perspectives on the AI trade. Meanwhile, Nintendo reported earnings that exceeded expectations, bolstered by US tariff refunds and strong sales of two first-party titles for its flagship Switch 2 console.