Nikkei gives up gains after chip industry-related stocks decline

Japanese Nikkei index gave up its early gains and closed with a decline today, Thursday, due to a decline in the shares of companies related to the chip industry, including Tokyo Electron shares, which were affected by the annual revenue estimates of the British chip design company (Arm Holdings), which were lower than market expectations.

According to Reuters, the Nikkei index fell 0.34% to 38,073.98 points after rising by 0.5% earlier in the session.

“ARM’s declines led to widespread selling of Tokyo Electron shares and other chip-related companies’ shares,” said Shuji Hosui, chief strategist at Daiwa Securities.

Arm Holdings reported full-year revenue estimates below expectations, causing its Frankfurt-listed stock to fall by about 10 percent on Thursday.

Shares of Tokyo Electron, a Japanese company that produces chip manufacturing equipment, fell by about 3%, and had the greatest impact on the performance of the Nikkei index.

The shares of SoftBank Group, which invests in technology and owns about 90% of ARM Holdings, also fell by about three percent.

The broader Topix index closed 0.26% higher at 2,713.46 points.

Among more than 1,600 companies listed on the main market of the Tokyo Stock Exchange, 1,081 stocks rose while 519 stocks fell.

The summary of the Bank of Japan’s monetary policy meeting in April showed a hawkish tendency, with many calling for the need to raise interest rates steadily.

The yield on 10-year Japanese government bonds rose to 0.91%, its highest level since April 26.