The Nikkei 225 index fell 0.78% to close at 54,293 on Wednesday, paring some of the previous session's gains. Market sentiment was dampened by disappointing earnings reports from several companies, while the Japanese stock market was also dragged down by the decline in technology stocks on Wall Street.

Global pressure came from a sell off led by the technology sector in the United States. Investors appeared to be rotating out of technology stocks deemed overvalued and into more "cyclical" stocks, causing chip and technology stocks in Japan to lose steam.

The biggest highlight came from Nintendo, which plunged 11%. The market reacted after sales momentum for its flagship Switch 2 console was perceived as slowing, and the company chose to maintain its annual forecast (rather than raise) for profit and hardware targets signals that investors perceived as less aggressive.

In the electronics sector, Ibiden fell 14.2% after releasing weak third-quarter results, making it the worst performing stock on the Nikkei that day. Ibiden's weakness also weighed on sentiment in the component manufacturing segment, which is sensitive to global demand cycles.

Other major stocks also fell, including Advantest (-2.1%), Lasertec (-7.2%), SoftBank Group (-2.2%), Hitachi (-4.1%), and NEC Corp (-11.8%). The pressure was felt most strongly in stocks that had previously been market favorites due to the momentum of technology and AI.

Domestically, investors are also tending to be cautious ahead of the snap election for the lower house this weekend. The ruling LDP is expected to gain more seats and push for a more expansive fiscal policy under Prime Minister Sanae Takaichi factors that could shift market sentiment in the near term, depending on the final outcome. (mrv)[sma]

Source : Newsmaker.id