Japanese shares experienced a decline exceeding 1% on Thursday, marking a second consecutive session of losses. This pullback comes as investors take a moment to reassess following recent rallies, remaining cautious amid concerns regarding the US interest rate outlook, rising yields, and ongoing geopolitical tensions. The Nikkei 225 experienced a decline of 1.42%, concluding at 69,042.11, whereas the broader Topix decreased by 1.51%, finishing at 4,091.46. “Japanese shares had risen at a rapid pace through yesterday, and profit-taking has since picked up. That selling pressure appears to be continuing today,” said Hiroki Takei.
Japanese AI-related shares exhibited a lacklustre performance despite Samsung Electronics, the leading memory chip manufacturer globally, forecasting an almost ninefold increase in third-quarter operating profit compared to the previous year. Shares of chipmaker Rohm experienced a decline of 5.19%, marking the most significant percentage drop in almost a month. Meanwhile, technology investor SoftBank Group saw a reduction of 4.28%, and Tokyo Electron fell by 2.48%. Concerns regarding US monetary policy persisted as the Federal Reserve minutes published on Wednesday indicated that a majority of participants were signalling the likelihood of an additional rate hike before the year’s end.
Market participants exhibited caution regarding the French and Italian debt markets, as escalating energy prices and fiscal apprehensions contributed to a fragile sentiment. Geopolitical tensions have dampened risk appetite, with increased attacks on shipping in the Gulf and the Strait of Hormuz raising concerns over Middle East oil supplies and driving crude prices higher. Breadth was negative, with 165 decliners in the Nikkei 225 compared to 56 advancers and four unchanged. The largest percentage losers in the Nikkei included semiconductor silicon wafer supplier Sumco, which declined by 5.73%.
This was followed by construction machinery manufacturer Komatsu, down 5.52%, and agricultural machinery and equipment producer Kubota Corporation, which fell by 5.42%. The largest percentage gainers were cybersecurity software company Trend Micro, which increased by 3.89%, followed by IT consulting firm Nomura Research Institute, which saw a rise of nearly 3%, and office equipment manufacturer Ricoh, which experienced an uptick of 2.33%.
