The Nikkei 225 index closed down around 0.9% at 50,150 on Thursday, down nearly 450 points from the previous day. The main pressure came from the technology sector and stocks related to the AI/chip theme, with shares of giants like SoftBank plunging sharply after global sentiment toward AI spending wavered following Oracle's disappointing financial report. Regionally, Asian markets also tended to be mixed to weaker despite earlier gains on Wall Street, limiting room for upside in the Nikkei.

From a fundamental perspective, the Japanese market is being squeezed in two directions: on the one hand, the Fed recently cut interest rates again, which is actually positive for risk assets globally. But on the other hand, expectations of an imminent Bank of Japan (BoJ) interest rate hike are growing, Japanese bond yields are rising, and this is starting to put pressure on stock valuations, particularly growth and technology stocks. Investors are also still weighing whether the Nikkei's rally above 50,000 has gone too far compared to real economic conditions. So, for now, the narrative is: a dovish Fed helps the "lower floor," but concerns about a hawkish BoJ and a decline in tech stocks caused the Nikkei to close the session in the red. (az)

Source: Newsmaker.id