Japanese Shares Fall for Second Session

The Nikkei 225 Index rose 0.7% to above 69,000 on Friday, recovering from earlier losses as weaker-than-expected US jobs data led investors to scale back expectations for Federal Reserve interest rate hikes this year. The softer labor report helped offset persistent concerns over the AI sector, where investors continue to question whether aggressive investment and intensifying competition can justify lofty valuations and sustain long-term earnings growth. Meanwhile, the yen's nearly 1% surge on Thursday, fueled by speculation that Japanese authorities could intervene in the currency market at any time, remained a headwind for domestic equities. Among individual stocks, Kioxia Holdings jumped 7.3%, followed by Kokusai Electric (6.5%), Fast Retailing (4.3%), Sony Group (2.3%), and Toyota Motor (1.1%).

The Nikkei 225 Index fell 1.5% to below 67,800 on Friday, extending losses for a second consecutive session as technology stocks remained under pressure amid concerns that the artificial intelligence-driven rally has outpaced underlying fundamentals. Investors questioned whether heavy spending and intensifying competition in the AI sector can support elevated valuations and deliver sustainable profits. Japanese firms tied to the global AI infrastructure buildout posted another day of steep losses, including Kioxia Holdings (-4.6%), Taiyo Yuden (-8.5%), Tokyo Electron (-3.4%), Murata Manufacturing (-5.2%), and Fujikura (-5%). Domestic equities also weakened as the yen rallied nearly 1% on Thursday, fueled by speculation that Japanese authorities could intervene in the currency market at any time.

The Nikkei 225 Index decreased 1307 points or 1.85 percent on Thursday to close at 69168 points. The decline was led by Mitsui Mining & Smelting (-10.91%), Taiyo Yuden (-10.40%) and Takara (-9.57%).