The Nikkei 225 index closed at a near three-week low on Wednesday, led by a decline in Softbank Group Corp, as investors took profits on AI-related stocks that had recently driven the market's gains.
The Nikkei fell 1.23% to close at 59,804.41, marking its lowest closing level since May 1st. The index has now closed lower for five consecutive sessions. The broader Topix index declined 1.53% to 3,791.65.
A market strategist noted that participants were selling the individual stocks that had pushed the Nikkei to a record high earlier in the month. "This is a reasonable adjustment for the Nikkei's excessive reliance on a handful of stocks," the strategist said.
The Nikkei had reached a record high of 63,799.32 on May 14th.
Among the biggest decliners, technology investment giant Softbank Group Corp dropped 6% on Wednesday. Chip-making equipment manufacturer Tokyo Electron fell 2.25%. Optical fiber manufacturer Fujikura plunged 8.25% after its operating profit forecast for fiscal 2028 fell below market expectations, extending its losing streak to a fifth day. As a supplier of materials for AI data centers, Fujikura had been one of the standout performers in the recent rally.
"Once Fujikura was sold, investors began selling other tech stocks," the strategist explained. However, they added that the sector's decline was limited ahead of the quarterly earnings report from AI chipmaker Nvidia later in the day. "If Nvidia's results are good, its stock could jump in the next session," the strategist said.
Nvidia supplier Advantest bucked the trend, closing up 1.32%.
Among the approximately 1,600 stocks traded on the Tokyo Stock Exchange's main board, 81% fell, 16% rose, and 1% ended flat.
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