Japan's Nikkei retreats from record peak as traders gauge fragile Mideast peace talks

TOKYO: Japan’s Nikkei share average retreated on Tuesday from a record high hit in the previous session, as investors cautiously assessed Middle East peace talks, with broader geopolitical uncertainties weighing on risk appetite.

The Nikkei was down 1.46% at 65,991.21, as of 0146 GMT, while the broader Topix slipped 1.18% to 3,894.29.

The Nikkei touched a record peak of 67,231.28 on Monday and posted a record closing high of 66,934.33, roughly 7% above the 25-day moving average, a sign of an overheated market.

“There was a caution for the Nikkei’s sharp rally, and the optimism for the early end of the Middle East conflict weakened and the oil prices rose,” said Daisuke Hashizume, senior strategist at Daiwa Securities.

Oil prices held on to most of the previous session’s sharp gains in early trade on Tuesday on uncertainty over the status of ceasefire talks between the United States and Iran and the potential reopening of the Strait of Hormuz.

US President Donald Trump said on Monday that talks with Iran were ongoing, while Tasnim news agency reported that Tehran had suspended indirect negotiations with Washington.

In Japan, AI-related shares came under pressure, with heavyweight investor SoftBank Group down 1.3%. Fibre-optic cable maker Fujikura tumbled 5.64% on broad-based selling in technology-linked names.

Shares of memory-chip maker Kioxia erased early gains to trade 1.5% lower as investors turned cautious ahead of a scheduled investor meeting later in the day.

Energy stocks bucked the trend, tracking gains in oil prices, with Inpex climbing 5.1%.

The mining sector jumped 4.35% to become the

Tokyo Stock Exchange’s (TSE) top-performing sector, while shipping firms rose 1% on expectations for firmer freight rates.

Of the nearly 1,500 stocks trading on the TSE’s prime section, 20% rose, 77% fell and 2% traded flat.