Japanese stock indices closed mixed on the 29th, with the Nikkei 225 falling 930.73 points (1.49%) to 61,434.19 while the TOPIX rose 0.26% to 3,974.03. The decline was triggered by a semiconductor stock selloff after Korea's KOSPI index dropped over 12% intraday, accelerating selling pressure in AI and semiconductor-related shares in Japan. An earthquake in Kumamoto Prefecture the previous day added negative sentiment as investors worried about potential impacts on corporate operations.
Nikkei 225 Falls 1.49% as TOPIX Gains
The Nikkei 225 index closed at 61,434.19, down 930.73 points (1.49%) from the previous trading day, according to Yonhap Infomax World Stock Index. The index opened higher and briefly recovered the 63,000 level in early trading before reversing to losses during the morning session. The TOPIX index rose 10.44 points (0.26%) to 3,974.03.
Semiconductor Stocks Lead Market Decline
Semiconductor and AI-related stocks accelerated their decline after Korea's KOSPI index fell over 12% intraday. SoftBank Group's stock price dropped over 7% by market close, while Advantest fell 2% and Tokyo Electron declined over 10%. Kioxia plunged over 15%, breaking below the 40,000 yen level—a decline of over 60% from its all-time high recorded in June. Taiyo Yuden's stock price fell over 13%, and Ibiden dropped over 9%.
Shota Yamafuji, stock market analyst at Tokai Tokyo Intelligence Lab, stated that "the current sharp decline in semiconductor stocks suggests individual investors who purchased related stocks through margin trading are selling," adding that "funds are not leaving the market, and if supply-demand conditions for semiconductor-related stocks improve, the Japanese stock market could return to an upward trend within this year."
Kumamoto Earthquake Disrupts Toyota Production
The earthquake that occurred in Kumamoto Prefecture the previous day negatively affected investor sentiment. Investors expressed concerns about the negative impact the earthquake could have on corporate activities. Toyota Motor announced it would suspend operations at three plants in Fukuoka Prefecture from the evening of the 29th through the 31st.
Sector Rotation Limits Nikkei Losses
The Nikkei 225 partially recovered its losses as funds moved from semiconductor stocks to relatively underperforming sectors such as services and automobiles. Toyota Motor's stock price jumped over 7%, and Mitsubishi Motors rose over 4%.
Hiroshi Namioka, chief strategist at T&D Asset Management, expected investors to take a skeptical view of tech stock prices following upcoming earnings announcements from technology companies. Microsoft and Meta are scheduled to announce earnings on the 29th (local time).
Japanese Government Bond Yields Decline
Japanese government bond yields fell across the curve. As of 3:38 PM, the 10-year JGB yield traded at 2.7464%, down 3.42 basis points from the previous session, according to Yonhap Infomax Overseas Interest Rates. The 30-year yield plunged 5.52 basis points to 3.9294%, while the 2-year yield declined 2.00 basis points to 1.4744%.
FAQ
What caused the Nikkei 225 to fall on the 29th?
The Nikkei 225 fell 930.73 points (1.49%) to 61,434.19 on the 29th, primarily due to a semiconductor stock selloff triggered by Korea's KOSPI index dropping over 12% intraday. An earthquake in Kumamoto Prefecture the previous day also negatively affected investor sentiment.
How did semiconductor stocks perform in Japan on the 29th?
Semiconductor stocks experienced significant declines, with Kioxia plunging over 15% to break below 40,000 yen, Tokyo Electron falling over 10%, SoftBank Group dropping over 7%, and Advantest declining 2%. Taiyo Yuden fell over 13% and Ibiden dropped over 9%.
