Japan's Nikkei heads for weekly loss as tech valuation concerns weigh; Topix rises

TOKYO: Japan’s Nikkei share gauge was volatile on Friday and headed for a weekly decline as investors weighed concerns around tech valuations against positive economic signals.

The benchmark Nikkei 225 was up 0.74% at 69,243.68, as of the midday break, after sliding as much as 1.6% earlier in the session.

The gauge is poised for a 0.17% slide on the week.

The broader Topix climbed 0.91% to 4,051.48.

The tech-heavy Nasdaq fell overnight in the US following a payrolls report that showed a downside surprise of 57,000 jobs.

The softer data prompted traders to pare back near-term US Federal Reserve rate-hike bets.

Broader market sentiment remained resilient, underpinned by data showing improving services activity in Japan.

The S&P Global final Japan Services PMI for June, released earlier in the day, rose to 52.2 from 50.0 in May.

Strengthening of the yen and a decline in oil prices helped drive a sector rotation out of tech shares and cyclical and consumer-related sectors, said Maki Sawada, an equities strategist at Nomura Securities.

“Certain sectors related to semiconductors and AI remain weak today,” Sawada said.

“If the decline in these high-value stocks begins to narrow, it’s possible that the Nikkei will also stabilise.”

There were 190 advancers in the Nikkei against 34 decliners, with one trading flat.

The largest percentage gainers in the index were Kioxia Holdings, up 7.25%, followed by Rohm, 6.97% higher, and Sumitomo Chemical, which gained 6.57%.

The largest laggards were Ibiden, down 4.06%, followed by Resonac, down 3.66%, and SoftBank Group , which slid 3.2%.