TOKYO - The Nikkei Stock Average fell for a second straight session in Tokyo as investors locked in profits from a rapid rally in artificial intelligence and semiconductor-related shares, briefly sending the benchmark down more than 1,300 yen before bargain hunting helped it recover part of the loss.
The Nikkei ended 613.41 yen lower at 69,174.97, after slipping below 69,000 during the day. The index had fallen below 70,000 on the previous day for the first time in about a week, and although it briefly rebounded on cues including a recovery in South Korean shares, buying failed to gather momentum.
The broader TOPIX also declined for a second straight day, falling 0.6% and ending below 4,000. Both the Nikkei and TOPIX limited their losses to less than 1%. The Tokyo Growth Market 250 Index edged lower, moving near the previous day’s closing level. Nikkei 225 futures ended daytime trading down 210 yen at 69,560.
Trading on the Tokyo Stock Exchange’s Prime Market remained heavy, with turnover totaling about 11.2526 trillion yen, though it was lower than the previous day. Decliners outnumbered gainers, with 802 stocks falling and 703 rising.
Selling took the lead from the start after the Nasdaq Composite extended its decline and the Philadelphia Semiconductor Index, known as the SOX, posted a sharp drop after recently hitting a record high. The weakness came as investors grew more aware that the rally in AI and chip-related shares may have run too fast.
Market participants closely watched South Korea’s KOSPI during Tokyo trading, as both Japanese and South Korean shares have become sensitive to flows from speculative overseas funds rather than only domestic fundamentals. Analysts said sharp intraday swings reflected futures-led buying and selling by foreign investors, with strong buying emerging at lower levels but selling pressure appearing whenever prices rose.
The Nikkei had gained about 8,000 yen over eight straight advances before falling roughly 3,000 yen over the latest two sessions. Some market watchers still viewed the decline as a temporary adjustment within a broader uptrend, but they also said investor appetite appeared to have cooled after the steep pullback. The pace of daily gains of more than 1,000 yen is expected to slow, with sellers likely to emerge more readily at higher levels.
Tokyo Electron and other major semiconductor names remained under pressure, showing little sign of aggressive cash-market buying. Kioxia rebounded slightly after a steep fall, but its recovery lacked strength. The stock’s high price level means buying one trading unit requires close to 10 million yen, making it difficult for individual investors to buy in cash and increasing reliance on margin trading. After a drop of more than 15% the previous day, some investors were believed to have been forced to cut positions or face additional margin requirements.
Attention is now focused on Micron Technology’s earnings, due on Wednesday night Japan time. Micron shares fell 13% in the previous U.S. session. Although the company has beaten market expectations for earnings per share for several consecutive quarters in recent years, its stock has often fallen the next day when results failed to exceed already elevated expectations. Investors are watching whether strong results will trigger renewed buying or further profit-taking.
SanDisk also dropped 13% in the previous U.S. session, adding to caution over memory-related shares. SoftBank Group, another major Nikkei component tied to AI expectations, fell sharply the previous day and remained volatile. The stock recovered after early selling, supported in part by comments at its shareholders’ meeting, but its upside remained heavy. Market sentiment is expected to depend heavily on whether SoftBank Group and Kioxia can regain momentum or resume their declines.
Toyota Motor continued to fall, hitting a new year-to-date low. Concerns over production declines and weaker sales in the Middle East weighed on the stock, particularly for models such as the Land Cruiser that are popular in the region. However, analysts also pointed to a broader shift of funds away from slower-moving blue chips and toward AI and semiconductor names. Toyota’s price-to-book ratio has fallen near 0.8, suggesting a sense of undervaluation, but the stock has declined for seven straight sessions even as the dollar-yen rate has risen.
The market will remain focused on Micron’s earnings and the subsequent reaction in U.S. shares, followed by indicators such as the personal consumption expenditures price index. In Japan, attention is expected to shift gradually toward domestic corporate earnings in July, including results for the April-June quarter.
With the Nikkei and TOPIX both ending lower, analysts said unstable trading may continue for several more days as investors test whether the latest decline is only a pause in an upward trend or the start of a deeper adjustment.
Source: テレ東BIZ
