Japan’s Nikkei Index Closes Nearly Unchanged Amid Tech Stock Pressure

The Japanese “Nikkei” index relinquished its early gains to close nearly steady on Thursday, as investors exercised caution due to the strong gains the index had recently achieved.

The Nikkei index declined by 0.03%, closing at 35,466.17 points, after having increased by approximately 0.7% earlier in the session.

The broader TOPIX index declined by 0.17 percent to reach 2492.09 points.

Shotaro Yasuda, a market analyst at the Tokai Tokyo Research Institute, said: “Investors are cautious due to the strong gains the index has recorded recently.”
Since the start of the year, the Nikkei has recorded an increase of eight percent, reaching its highest level since February 1990.

Yasuda clarified, “The momentum seen in the ‘Nikkei’ index was bolstered by the weakening yen. However, investors are also cautious about the yen’s decline not lasting for an extended period, which has prompted them to sell shares.”

The drop in shares of Fanuc, a robotics manufacturer with a presence in China, by 2.63 percent exerted the most significant pressure on the Nikkei index.
Yasuda clarified that the decline in Fanuc’s stock reflects investor concerns about the prospects of the Chinese economy.

SoftBank Group’s stock fell by 0.74 percent, while the shares of video game company Nexon declined by 5.53 percent.

As the yen continued to weaken against the dollar, Toyota Motor’s shares rose by 2.63 percent, providing the largest boost to the TOPIX index.

The automotive industry index climbed by 1.97 percent, marking it as the top performer among the 33 subsectors on the Tokyo Stock Exchange.

The tire manufacturing sector saw an increase of 1.64 percent, with shares of Bridgestone climbing by 1.68 percent and Toyo Tire jumping by 4.56 percent.

On Thursday, the dollar hovered near its highest level in a month against a basket of currencies, following strong U.S. retail sales data that bolstered expectations that the Federal Reserve (the U.S. central bank) would not rush to cut interest rates.

The weakening of the yen bolsters the position of export company stocks, as it enhances the value of their overseas earnings in yen when the firms repatriate these profits back to Japan. (Reuters)