Japanese Shares Drop in Tech Selloff

The Nikkei 225 Index fell 2.6% to below 67,000, while the broader Topix Index declined 0.8% to 4,055 on Thursday, snapping a two-day winning streak as semiconductor shares came under renewed selling pressure amid persistent concerns over the sustainability of the artificial intelligence trade. Investors also remained focused on escalating attacks in the Middle East, which have driven oil prices sharply higher this week and revived worries about inflation and the outlook for interest rates. Meanwhile, data showed US producer prices unexpectedly declined in June, lowering expectations of a near-term Federal Reserve rate hike. Among the biggest decliners were Japanese technology heavyweights, including Kioxia Holdings (-8.7%), Tokyo Electron (-5.2%), SoftBank Group (-5.9%), Advantest (-5.1%), and Fujikura (-5%).

The Nikkei 225 Index rose 841 points or 1.24 percent on Wednesday to close at 68585 points. Leading the gains are Lasertec Corp (9.78%), Taiyo Yuden (7.21%) and Furukawa Electric (7.10%).

The Nikkei 225 Index climbed 1.49% to close at 68,751, while the broader Topix Index advanced 1.22% to 4,088 on Wednesday, extending gains from the previous session as Japanese equities tracked Wall Street higher after softer-than-expected US inflation data reduced expectations of a near-term Federal Reserve interest rate hike. Investors also looked past escalating geopolitical tensions in the Middle East after the US launched another round of strikes against Iran while reinstating its naval blockade of Iranian ports near the Strait of Hormuz. On the domestic front, data showed Japan’s machinery orders fell more than expected in May, reflecting broad-based weakness in business investment. Technology and AI-related stocks led the advance, with Kioxia Holdings surging 5.6%, Advantest rising 5.6%, Tokyo Electron gaining 4.7%, Taiyo Yuden adding 6.5%, and Lasertec jumping 10%.