Japanese Shares Drop for Second Day

The Nikkei 225 Index fell 1.6% to below 61,700, while the broader Topix Index slipped 0.5% to 3,860 on Friday, extending declines from the previous session as investors monitored developments in the Middle East and the ongoing summit between President Donald Trump and Chinese President Xi Jinping. Oil prices were on track for a sharp weekly increase after US-Iran negotiations stalled and the Strait of Hormuz remained effectively closed, weighing on oil-import-dependent economies such as Japan. Investor sentiment also turned more cautious after Xi warned during talks with Trump that Taiwan could become a source of “clashes” between the world’s two largest economies. Domestically, stronger-than-expected producer inflation reinforced expectations that the Bank of Japan may face growing pressure to raise interest rates. Major decliners included Kioxia Holdings (-8.2%), Fujikura (-9.6%), Furukawa Electric (-6.3%), Advantest (-6.8%) and Disco Corp (-5%).

The Nikkei 225 Index climbed 0.3% to above 62,800, while the broader Topix Index advanced 1.1% to 3,920 on Friday, recovering from losses in the previous session as Japanese equities tracked an overnight technology-led rally on Wall Street. Investor sentiment was supported by strong corporate earnings and continued momentum in artificial intelligence-related stocks. Markets also found support from the Beijing summit between US President Donald Trump and Chinese President Xi Jinping, with Trump stating that ties between the world’s two largest economies remain strong and are improving despite ongoing disagreements over Iran, Taiwan, and other issues. Major gainers included Fujikura, which rose 2.3%, SoftBank Group up 3.1%, Mitsubishi UFJ advancing 2.4%, Fanuc surging 7.7%, and Toyota Motor gaining 2%. For the week, the Nikkei was headed for a largely flat finish, while the Topix remained up more than 2%.

The Nikkei 225 Index fell 0.98% to close at 62,654 on Thursday, while the broader Topix Index lost 1.03% to 3,879, with Japanese equities retreating from record highs as investors locked in profits following a strong rally. SoftBank Group dropped 4.3% despite reporting a sharp increase in quarterly profit driven by valuation gains tied to its investment in OpenAI. Meanwhile, Fujikura plunged 19.1% even after posting strong double-digit growth in both sales and profits. Elsewhere, mining company Mitsui Kinzoku declined 7.9% after issuing a weaker profit outlook for FY2027 despite forecasting higher revenue. Other major decliners included Kioxia Holdings (-4.6%), JX Advanced Metals (-4.7%), Mitsubishi Heavy Industries (-5.7%), Sumitomo Electric (-5.1%) and Sony Group (-5.3%). Investors also continued monitoring the meeting between US President Donald Trump and Chinese President Xi Jinping amid hopes for improved relations despite ongoing tariff disputes and other contentious issues.