Global Market: Japan stocks fall for second day as profit-taking, rate fears weigh

Japanese shares fell about 1% on Thursday, extending losses for a second straight session, as investors paused after a recent rally amid uncertainty over the US interest-rate outlook and heightened geopolitical tensions.

The Nikkei 225 declined 0.9% to 69,366.14, while the broader Topix dropped 1.54% to 4,090.19.

According to Reuters, Japanese equities have come under profit-taking pressure after advancing rapidly in recent sessions, with investors also becoming more cautious ahead of further signals on US monetary policy.


Read more: Global Market Today: Asian stocks drop on inflation concerns, oil gains

AI-related and technology stocks were among the weaker performers despite upbeat guidance from Samsung Electronics. The world's largest memory-chip maker forecast a nearly ninefold year-on-year increase in third-quarter operating profit.

Chipmaker Rohm fell 3.5%, while SoftBank Group, a major technology investor, declined nearly 3%. Yaskawa Electric lost 2.6%.

US rate outlook in focus

Investor sentiment was also pressured by uncertainty over the Federal Reserve's monetary policy path. Minutes from the Fed's September meeting, released on Wednesday, showed divisions among policymakers over the justification for the rate hike, while most officials indicated support for another increase by year-end, Reuters reported.

Read more: US stocks: US market ends lower, off record highs, as Treasury yields climb

The US 10-year Treasury yield climbed to a 24-year high overnight before retreating, adding to pressure on risk-sensitive assets.

Geopolitical tensions weigh

Geopolitical concerns further dampened risk appetite as increased attacks on shipping in the Gulf and the Strait of Hormuz raised fears of disruptions to Middle East oil supplies. Crude prices moved higher as investors assessed the potential impact on global energy markets.

Market breadth in Japan remained weak, with 187 stocks declining on the Nikkei 225 compared with just 38 advancers.

Kubota was the biggest percentage loser on the Nikkei, falling 7.42%, followed by Komatsu, which declined 7.2%. Machine-tools maker Okuma dropped 4.67%.

On the upside, cybersecurity software company Trend Micro gained 5.79%, while chipmaker Kioxia rose 3.27% and chip-equipment maker Screen Holdings advanced 2.58%.

Investors will next focus on corporate earnings, with Fast Retailing, operator of the Uniqlo clothing chain, and convenience-store group Seven & i Holdings scheduled to report results after the market close.

(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times.)