Japanese shares experienced a downturn, retreating from recent highs as investors capitalised on profits following Monday’s surge. The focus is now shifting towards potential outcomes from Prime Minister Sanae Takaichi’s upcoming meeting with US President Donald Trump.
The blue-chip Nikkei 225 Stock Average decreased by 0.4 per cent to 50,301.15 as of 10.40 am in Tokyo (12.40pm AEDT). The broader Topix Index also declined, shedding 0.5 per cent to reach 3308.35. Electronics and service sector shares exerted significant downward pressure on the Topix, while banking and information technology stocks saw gains.
This decline follows heightened anticipation surrounding the Takaichi-Trump meeting, which had propelled the Nikkei past the 50,000 mark on Monday. A cautious sentiment is also prevailing as the market anticipates the Bank of Japan’s (BoJ) upcoming policy announcement later in the week.
According to Kazuhiro Sasaki, head of research at Phillip Securities Japan, the Nikkei’s breach of the 50,000 threshold has triggered profit-taking. Sasaki noted that much of the optimism surrounding the Trump talks is already priced into the market. Investors are also holding back in anticipation of the BoJ meeting and the Federal Reserve’s rate decision. He added that unexpected remarks from the central banks could instigate further stock sell-offs.
