Japan’s Nikkei share average declined for the fourth straight session on Thursday, marking its lowest close in a month. This downturn reflects the prevailing uncertainty surrounding interest rates and currencies, which has deterred investors from engaging with risk assets. The Nikkei 225 Index concluded the session down 0.17 percent at 64,214.48, having faced challenges in establishing a clear trajectory throughout the trading day. The broader Topix increased by 0.5 percent, reaching 4,102.04. “Market attention is focused on interest rates and foreign exchange, and uncertainty around those areas is prompting selling in risk assets,” said Naoto Takahashi.

Japanese shares related to chips and AI exhibited a mixed performance. Chip-testing equipment manufacturer Advantest experienced a decline of 0.8 percent, while cable and optical fibre producer Fujikura saw a decrease of 2.73 percent. In contrast, memory chipmaker Kioxia recorded an increase of 1.31 percent, and semiconductor equipment manufacturer Tokyo Electron rose by 0.36 percent. US Treasury yields declined from multi-year highs overnight, while 30-year Japanese government bond yields fell by as much as 10 basis points on Thursday. Oil prices experienced a slight decline, reflecting the absence of new hostilities in the ongoing tensions between the United States and Iran.

Japan’s energy explorer sector experienced a decline of 3.26 per cent, positioning it as the least performing sector among the 33 sub-indexes of the Tokyo bourse. The yen extended its gains as investors adjusted their expectations for domestic interest rates in a more hawkish direction, appreciating by 1.24 percent against the dollar to 156.71. Market breadth exhibited a positive trend, with 141 constituents of the Nikkei experiencing gains while 82 faced declines. However, the benchmark was pulled down by losses in a select few heavily weighted stocks. Higher yields present a clear headwind for Asian equities, particularly for “longer duration tech stocks,” noted a portfolio manager at Gama Asset Management.

Among the largest percentage decliners on the Nikkei were leading Japanese oil and gas explorer Inpex, which fell by 4 percent, and industrial automation and controls firm Yokogawa Electric, which decreased by 3.75 percent. Furnishing retailer Nitori Holdings experienced an increase of 8.41 percent, while industrial machinery and equipment manufacturer Sumitomo Heavy Industries saw a rise of 5.09 percent, positioning them as the most significant percentage gainers on the Nikkei.