Japan's Nikkei share average edged lower on Thursday as a stronger yen weighed on exporter-heavy stocks. Chip-testing equipment maker Advantest surged 7.6% after raising its annual profit forecast, limiting the losses. A less dovish Federal Reserve also dampened market sentiment.
On Thursday, Japan's Nikkei share average (.N225) closed down about 30 points, or 0.1%, at 53,329.39. Among its 225 components, 154 declined while 69 rose, with two unchanged. The broader Topix index (.TOPX) fell 0.3% to 3,523.24.
The yen, which had pulled back slightly overnight after three days of sharp gains, saw renewed buying on Thursday, pressuring exporter revenues when converted back to yen. Wataru Akiyama, a strategist at Nomura Securities, said, “Japan’s stock market is seeing a temporary withdrawal of funds, including profit-taking selling, as investors take a wait-and-see attitude.” He added, “If strong outlooks emerge for AI-related sectors, the Nikkei could rise again, but we haven’t reached that point yet.”
Advantest (6857.T), a supplier to Nvidia (NVDA.O), vaulted 7.6% after raising its annual profit forecast by 21%, boosting the Nikkei by about 458 index points. However, most other Japanese tech shares sold off. Tokyo Electron (8035.T) dropped 4.7%, and SoftBank Group (9984.T) lost 2.7%, following Microsoft's (MSFT.O) Wednesday announcement of record AI spending, which raised worries about delayed payoffs from the industry's massive investments.
A less dovish Federal Reserve on Wednesday also weighed on sentiment, with investors cautious amid accelerating earnings seasons in Japan and the U.S., including Apple's (AAPL.O) results later that day. Automakers (.ITEQP.T) rose 1.4% as the top performer among the Tokyo Stock Exchange's 33 industry groups, rebounding from a 6.7% plunge over the prior three sessions.
The market remains in a holding pattern, awaiting firmer AI sector prospects.
