Global Markets: Japan's Nikkei retreats from record high as AI rally sparks caution

Japan's Nikkei share average retreated from a record peak to end nearly flat on Wednesday, as investor caution grew about the fast-paced rally in AI-related stocks.

The Nikkei closed at 64,999.41, after rising as much as ‌2.2% earlier ⁠in the ⁠session to hit a record intraday high of 66,428.81. The broader Topix fell 0.52% to 3,918.01.

Shares of chipmaking equipment maker Tokyo Electron and chip-testing equipment maker Advantest ended up 2.1% and 4.05%, respectively, making them the biggest contributors to the Nikkei.


"Caution emerged for the high-pitched rally. ⁠The market ‌sold AI-related shares that have gained in the latest sessions," said Shunichi Otsuka, general manager at ⁠the research and strategy department at Ichiyoshi Securities.

Uniqlo-brand owner Fast Retailing rose 3.06%.

SoftBank Group slid 7.26%, weighing most on the Nikkei and marking the index's biggest percentage loss. The technology investor's shares are still up 7.62% so far this week, outpacing the Nikkei's 2.62% gain.

Fibre-optic cable maker Fujikura reversed early gains to ‌end 3.55% lower. Its peer Furukawa Electric fell 6.7%.

High-flying memory maker Kioxia dropped 3.06%.

Banks and financials dragged the Topix lower. ⁠Sumitomo Mitsui Financial Group lost 1.9%, while Mitsubishi UFJ Financial Group and Mizuho Financial Group slipped 0.98% and 1.93%, respectively.

The Topix's value share index fell 0.85%, while the growth share index slipped 0.15%.

Of the nearly 1,600 stocks trading on the Tokyo Stock Exchange's prime market, 45% rose, 50% fell, and 3% traded flat.