Nikkei Index Closes Lower Due to Tech Stock Woes

The Japanese index “Nikkei” declined on Wednesday, influenced by the decrease in the shares of technology companies that have a significant weight on the index. However, significant gains for Toyota Motor and Mitsubishi shares due to strong profit and dividend expectations for shareholders mitigated the losses.

Nikkei closed down 0.11% at 36,119.92 points, recovering from an earlier decline of 0.84% during the session.

Naoki Fujiwara, one of the senior fund managers at Shinkin Asset Management, said, “Investors were making profits from the best-performing companies and buying cheaper stocks as we saw in the chip-related stocks today, which follow the losses in the US chip stocks index.”

All three major Wall Street indices rose overnight, but the Nasdaq index, which is dominated by technology stocks, only rose by 0.07% due to the decline of the Philadelphia Semiconductor Index by 1.14%. In Japan, Daikin Industries, an air conditioning manufacturing company, decreased by 7.07%.

Tokyo Electron, which specializes in chip-making equipment, lost 0.52%, and Advantest, which manufactures chip testing equipment, declined by 0.84%.

KDDI, a telecommunications company, declined by 1.96% after announcing a tender offer worth 500 billion yen ($3.38 billion) to purchase Lawson, a convenience store chain, in partnership with Mitsubishi Corp.

Lawson’s stock jumped by 15.22%. The broader Topix index rose by 0.42% to 2,549.95 points, supported by Toyota and Mitsubishi shares. Mitsubishi shares soared by 9.74% to its highest level ever after the trading company announced that it would spend up to 500 billion yen to repurchase around 10% of its shares.

Toyota Motor’s stock rose by 3.99% after the car manufacturer raised its full-year operating profit forecasts by about 9%. Among more than 1,600 stocks in the main market at the Tokyo Stock Exchange, 52% rose, 44% declined, and 2% remained unchanged. (Reuters)