Japanese Shares Pull Back From Record Highs

The Nikkei 225 Index fell 1.5% toward 67,000, while the broader Topix Index declined 0.8% to 3,964 on Thursday, as Japanese equities retreated from record levels amid renewed tensions between the US and Iran. The latest escalation undermined hopes for a peace agreement and drove energy prices higher, keeping inflation and interest-rate concerns in focus. Domestic stocks also followed US futures lower after a weak outlook from US chipmaker Broadcom weighed on the global technology sector. Meanwhile, billionaire investor Ray Dalio cautioned that the rapidly expanding artificial intelligence market is exhibiting bubble-like characteristics that could eventually unwind. Technology and AI-related shares led losses in Japan, including SoftBank Group (-7.8%), Kioxia Holdings (-1%), Fujikura (-6.1%), Murata Manufacturing (-2.9%), and Furukawa Electric (-4.4%).

The Nikkei 225 Index jumped more than 2% to close above the 68,000 mark for the first time on Wednesday, setting a fresh record as a continued rally in technology stocks lifted the market. Optimism surrounding artificial intelligence-related opportunities outweighed concerns over the lack of progress in US–Iran peace negotiations. Japanese firms continue to play a significant role in the expansion of AI infrastructure worldwide, positioning them to benefit from the sector’s rapid growth. Leading gains in the technology sector were chipmaking equipment manufacturer Tokyo Electron and semiconductor testing equipment maker Advantest, which surged 13.4% and 5.1%, respectively. Other top performers included Kioxia Holdings (+0.7%), Fujikura (+9.3%), and Furukawa Electric (+4.3%). Meanwhile, investors continued to monitor US–Iran talks, with mixed signals from both sides keeping geopolitical uncertainty elevated.

The Nikkei 225 Index rose 1969 points or 2.95 percent on Wednesday to close at 68703 points. Leading the gains are Screen Holdings (18.12%), Tokyo Electron (13.13%) and Renesas Electron (10.89%).