TOKYO: Japan’s Nikkei share average fell on Wednesday as investors awaited earnings from AI chip leader Nvidia, while cautious outlook of domestic firms amid uncertainties about rate and currency moves weighed on sentiment.
The Nikkei was down 0.57% to 38,726.33 by 0206 GMT, while the broader Topix had fallen 0.51% to 2,745.77.
“The whole world is awaiting the result of Nvidia. The outcome will affect global stocks, particularly the US equities, which will affect Japanese stocks,” said Shuji Hosoi, senior strategist at Daiwa Securities.
Nvidia, Wall Street’s third-largest firm by market capitalization, will report results after the closing bell on Wednesday in what is likely to be a significant market catalyst and will test whether the outsized rally in AI-related stocks can be sustained.
Japanese chip-giants Tokyo Electron and Advantest fell 1.67% and 0.3%, respectively. These heavyweight chip stocks had helped the Nikkei to scale a record intraday high of 41,087.75 on March 22.
The index has been hovering below 40,000 since the beginning of April, partly because sentiment was dragged lower by local companies’ modest earnings forecasts, strategists said.
Japan’s Nikkei little changed as investors take a breather
“Today’s declines were bigger than expected. Investors, particularly foreigners, might be selling Japanese stocks to buy overseas stocks whose outlook is stronger,” Hosoi said.
The markets are bracing for further rate hikes by the central bank this year.
Japanese government bond (JGB) yields have risen this month on hawkish hints from the Bank of Japan as it seeks to contain the yen’s depreciation. SoftBank Group rose 1.55% to become the biggest support for the Nikkei. Air-conditioning maker Daikin Industries rose 1.8%.
Kusuri No Aoki Holdings rose 2.94% after Hong Kong-based activist fund Oasis Management raised its stake in a drug store chain. Of the 225 components on the Nikkei, 61 stocks rose and 162 fell, while 2 were flat.
The shipping industry fell 2% to become the worst performer among the Tokyo Stock Exchange’s 33 industry sub-indexes.
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