Japan’s Nikkei Retreats from Record High Amid Decline in SoftBank Group Stocks.

The Nikkei share average experienced a slight retreat on Friday, settling at 62,713.65, down 0.19% from the record high achieved in the previous session. After surging 5.6% on Thursday, crossing the significant psychological barrier of 63,000 for the first time, the index’s decline is considered marginal by analysts. The broader Topix index also fell 0.29% to 3,829.48, although it marked a weekly gain of 2.7%. Sentiment was affected by several factors, including the performance of technology investor SoftBank Group and tensions related to U.S.-Iran hostilities, which contributed to an uptick in crude oil prices.

SoftBank Group led the downturn among major index components, dropping 4.56% as its U.S.-listed Arm Holdings faced pressure due to concerns over a weakening smartphone market and supply issues regarding AI chips. Also of note, Toyota Motor’s stock fell 2.18% as the automaker adjusted its profit forecast downward by 20% for the current financial year, citing cost and supply uncertainties linked to the Middle East conflict. On a larger scale, Toyota has seen a year-to-date decline of 13%, while Sony Group, which closed 0.51% lower, has experienced a 23% drop, reflecting broader pressures on the technology and automotive sectors.

Market dynamics showed a broader trend, with 52% of the stocks traded on the Tokyo Stock Exchange’s prime market declining, while only 45% saw gains. Notably, banks were impacted, with both Mitsubishi UFJ Financial Group and Mizuho Financial Group experiencing losses of 1.97% and 2.24%, respectively. In contrast, chip-testing equipment maker Advantest managed to recover from early losses, gaining 0.57%, while silicon wafer producer Sumco surged 18%, becoming the top gainer on the Nikkei. The mixed performance underscores the volatility present in the current market environment, influenced by geopolitical tensions and sector-specific challenges.

Source: The Economic Times

(Expert Note: This report was prepared by the Wealthova team.)