Japan's Nikkei share average fell 0.6% on Wednesday after a record high the previous day, weighed down by technology stocks tracking Wall Street's decline. The broader Topix index edged up slightly, buoyed by smaller shares and automakers. Upcoming elections and consumption tax debates could shape future market trends.
Japan's benchmark Nikkei share average (.N225) fell 0.6% to 54,384.53 as of 0206 GMT on February 4, Wednesday, following a nearly 4% climb to a record high on Tuesday, its biggest daily gain since October 25.
The broader Topix index (.TOPX) reversed course, inching up 0.12% to 3,650.02. Naoki Fujiwara, senior general manager at Shinkin Asset Management, said, “The Nikkei fell, but overall sentiment was not bad as smaller shares were firm.” He added, “Whether this trend will continue or not depends on the outcome of the election and the fate of the consumption tax. If the tax on food is not cut or reduced, market theme will shift to larger stocks, such as defense and artificial intelligence.”
Technology stocks heavily dragged the index. Chip-testing equipment maker Advantest (6857.T) dropped 2%, becoming the biggest drag on the Nikkei. Tokyo Electron (8035.T) lost 1.64%. Nintendo (7974.T) tumbled 10% after maintaining its annual earnings and hardware forecasts, though it reported a 23% jump in quarterly profit driven by robust sales of its Switch 2 console. Ibiden (4062.T), a maker of high-performance electronics and ceramics, plunged 12.6%, the worst percentage loser on the Nikkei.
The Topix's smaller share index (.TOPXS) outperformed, rising 0.63%, while the Mid400 index (.TOPXM) gained 0.49%. Of more than 1,600 stocks on the Tokyo Stock Exchange's prime market, 65% rose, 31% fell, and 2% were flat. Fiber optic cable makers bucked the trend, with Furukawa Electric (5801.T) jumping 8.9% and Fujikura (5803.T) rising 5.5%. Automakers advanced, as Toyota Motor (7203.T) gained 3.5% to become the biggest contributor to the Topix's rise, and Honda Motor (7267.T) rose 2.38%.
