The Japanese stock market weakened after rising sharply in recent sessions. This correction occurred as market participants began locking in profits, while investors' attention shifted to election details that are expected to determine the direction of Japanese economic policy.

The Nikkei Stock Average fell 0.7% to 53,535.91. This decline was primarily driven by the decline in automotive and electronics stocks, which combined, indicating the greatest pressure came from large-cap stocks.

In the automotive sector, Toyota Motor fell 2.1%. Meanwhile, in the electronics group, Olympus fell 2.5%. These two sectors are sensitive to global sentiment and exchange rates, so when the market becomes defensive, their shares usually quickly waver.

Currency-wise, USD/JPY was at 157.77, down from 158.38 at the close of the Tokyo market on Friday. A slight strengthening of the yen like this often puts pressure on exporter stocks, as profits in yen can appear "smaller" when the exchange rate changes.

Investors are now focused on monitoring the election details and the direction of Prime Minister Sanae Takaichi's economic strategy, particularly regarding plans to strengthen growth and build public confidence. Post-election policy uncertainty has led the market to remain cautious for now.

Going forward, Nikkei sentiment will depend heavily on two factors : how clear the election results are and how convincing the government's economic policy package is. If the policy direction feels pro-growth and stable, there is still potential for a rebound but if the details are unclear, volatility could continue. (asd) [sma]

Source : Newsmaker.id