Japan’s Nikkei falls on tech drag, but set for biggest monthly gain in four

TOKYO: Japan’s Nikkei share average retreated on Friday from a record closing high, dragged down by heavyweight chip and artificial intelligence-related shares, but was on track for its biggest monthly gain in four months.

The Nikkei fell 0.8% to 58,292.64 by 0146 GMT. It has risen 9% so far this month, heading for its biggest monthly gain since October, as Prime Minister Sanae Takaichi’s landslide election win in this month’s general elections has raised bets for big fiscal spending.

The broader Topix was up 0.43% at 3,897.24.

It has gained 9% this month in what could be its biggest monthly jump since November 2020.

On Friday, chip-testing equipment maker Advantest fell 4.62% after Nvidia slipped 5.5% overnight and dragged other US chip stocks lower. The US Philadelphia SE Semiconductor index fell 3.2%.

Chip-making equipment maker Tokyo Electron lost 3.77% and technology investor SoftBank Group slipped 3.4%.

Fibre-optic cable makers, beneficiaries of AI data centre investments, fell sharply, with Furukawa Electric and Fujikura losing more than 5% each.

“Investors rotated into beaten-down shares and sold stocks that had been strong,” said Shuutarou Yasuda, a market analyst at Tokai Tokyo Intelligence Laboratory.

Software-related shares, a target of selloff in recent sessions on AI disruption fears, rose, with Nomura Research and NEC climbing 3% each. Sony Group jumped 5.6% to become the biggest source of gains for the Topix.

The audio-equipment and game maker raised its share buyback plan to up to 250 billion yen ($1.60 billion) from 150 billion yen.

Of the more than 1,600 shares trading on the Tokyo Stock Exchange’s prime market, 80% stocks rose, 17% fell and 2% traded flat.