Japanese Stocks Decline on Profit-Taking

The Nikkei 225 fell 0.4% to below 41,700, while the Topix Index dropped 0.6% to 2,960 on Friday, as investors booked profits following a sharp rally that pushed both indexes to new highs.

Despite the pullback, both benchmarks remain on track to post weekly gains of over 4%, buoyed by optimism around the recently signed US-Japan trade deal.

Under the agreement, Japanese exports to the US will face a 15% tariff, well below the 25% threatened by President Trump earlier this month, easing some trade-related uncertainty.

On the economic front, Tokyo’s core inflation came in slightly below expectations for July but remained well above the Bank of Japan’s 2% target, reinforcing expectations for another rate hike later this year.

In corporate news, Shin-Etsu Chemical plunged nearly 10% after issuing a weaker profit outlook for fiscal 2025.

Other notable losers included Lasertec (-1.5%), Toyota Motor (-1.7%), and Keyence (-1.7%).