Japan’s Nikkei share average dropped more than 2 per cent on Friday (Jul 12), retreating from the previous session’s record high, as tech stocks tracked their US peers lower and the threat of currency intervention spurred profit-taking ahead of a long weekend.
The Nikkei slumped 2.45 per cent to 41,190.68 at the close. The 1,033.34-point drop was the index’s biggest decline this year.
Chip-making equipment giant Tokyo Electron was the biggest drag by index points, sliding 6.18 per cent. Smaller peer Disco was the biggest decliner, down 8.77 per cent.
That followed a 3.47 per cent slide for the Philadelphia SE Semiconductor Index overnight.
Japan’s broader, less tech-heavy Topix declined 1.18 per cent on Friday (Jul 12).
Despite the sell-off, the Nikkei finished the week up about 0.7 per cent, after surging to a record high of 42,426.77 on Thursday.
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“A natural retreat following that strong three-day rally is the biggest factor behind today’s move,” Nomura Securities equities strategist Kazuo Kamitani said.
The stronger yen due to an overnight surge that many analysts, including Kamitani, attributed to likely Japanese currency intervention “was not really having an effect” on stock prices, he said.
At the same time, “it’s natural to think there could be another round of intervention during the long weekend,” spurring traders to square positions, Kamitani added.
Japanese financial markets are closed on Monday for a public holiday.
Meanwhile, a decline in domestic bond yields, precipitated by a steep drop in US Treasury yields, weighed on the shares of financial institutions.
Insurers were the worst performers among the Tokyo Stock Exchange’s 33 industry groups, down 4.11 per cent, followed by electric machinery, off 2.69 per cent. Banking sagged 1.79 per cent.
Elsewhere, AI-focused startup investor SoftBank Group slid 4.4 per cent after announcing the acquisition of chipmaker Graphcore.
Uniqlo store operator Fast Retailing dropped 4.85 per cent and 7&i Holdings, the operator of 7-Eleven stores in Japan, lost 6.49 per cent, both after disclosing financial results. REUTERS
