Tech shares drag Japan's Nikkei lower

Apr 25, 202403:00 UTC

Japan's Nikkei share average traded lower on Thursday after rising sharply in the previous session, with technology stocks leading the losses.

The Nikkei NI225 fell 1.67% to 37,818.11 by the midday break, set to snap a three-session rally.

The index rose 2.4% on Wednesday to reclaim the 38,000 level in its biggest daily jump in more than a month.

The broader Topix TOPIX was down 1.25% to 2,676.73.

"The market has been volatile lately because there are many uncertainties that have changed investors' premises," said Kentaro Hayashi, senior strategist at Daiwa Securities.

"Inflation in the U.S. is more persistent than expected, which pushed U.S. yields higher, and geographical tensions in the Middle East have lifted oil prices."

A Nikkei volatility index (.JNIV) hit 27.82 on April 19, its highest level since Oct. 3, and was last at 20.77.

Chip-related shares dragged the Nikkei lower, with Tokyo Electron 8035 and Advantest 6857 falling 3.22% and 2.04%, respectively. Shin-Etsu Chemical 4063 lost 2.22%.

Technology investor SoftBank Group 9984 fell 1.12%.

Toyota Motor 7203 fell 2.87% despite the yen's hitting a 34-year low.

Overnight, the yen USDJPY fell below 155 to its weakest against the dollar since June 1990, a level seen as authorities' line in the sand that heightens the chance of currency intervention.

The market is focusing on whether Bank of Japan Governor Kazuo Ueda will make any hawkish comments on prospects of a near-term interest rate hike at the end of its two-day policy meeting on Friday.

Fanuc 6954 lost 2.51% after the robot maker's annual profit forecast was below the market expectations.