Japan’s Nikkei declines, erasing week’s gains amid chip sector losses

Japan’s Nikkei index closed lower on Friday, reversing the week’s gains, with chip sector stocks falling in line with their American counterparts.

According to Reuters, the Nikkei index lost 1.34% to close at 35,751.07 points, breaking a two-week series of gains with a loss of 0.59%. It started the day with a rise of 0.76% during the week.

Among the 225 companies listed in the index, the shares of 185 companies declined, the shares of 39 companies rose, and the shares of one company remained stable.

Profit taking ahead of the weekend exacerbated the declines, with some technical indicators still indicating that the rise that took the Nikkei to a 34-year high of 36,984.51 points on Tuesday was too rapid. The main index is rising about 3.2 percent above its 25-day moving average.

Tuesday’s peak coincided with the Bank of Japan’s decision to leave stimulus measures unchanged, but the tendency for monetary tightening shown by the central bank president in the press conference after the meeting influenced the market during the latter part of the week.

The Nikkei has risen 6.83% since the beginning of the year, outperforming all of its major competitors, including the Standard & Poor’s 500 index, which closed at record levels for three consecutive sessions, bringing its gains since the beginning of the year to 2.61%.

About 500 Japanese companies are expected to announce their financial results next week, and in the United States as well, Apple, Microsoft, Amazon, Google, and a group of companies affiliated with Meta Company will announce their financial results.

The losses of shares of Advantest and Tokyo Electron, which are heavy in the chip manufacturing sector, deepened the decline of the Nikkei index on Friday, followed by SoftBank Group, which focuses on investing in artificial intelligence, as the shares of the three companies fell by 5.51%, 2.39%, and 2.2%, respectively.

Chip manufacturer Renaissance Electronics was the biggest percentage loser, falling 7.75%.