Nikkei hits six-month low before recover
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Japan's Nikkei index reached a six-month low on Tuesday, influenced heavily by overnight declines on Wall Street, driven by persistent tariff concerns and fears of a possible recession in the United States. The Nikkei fell as much as 2.8% intraday, briefly touching 35,987.13—its lowest level since mid-September—but recovered significantly to close down just 0.64% at 36,793.11, following improved sentiment driven by rising U.S. stock futures.
Market recovery was aided by investor buybacks, encouraged by the reversal of U.S. futures in Asian trading. Shigetoshi Kamada of Tachibana Securities noted that the resilience of Japan’s economic fundamentals motivated investors to reclaim earlier losses. Notably, chip equipment manufacturer Advantest reversed its initial decline, closing 1.69% higher and providing key support to the index. Similarly, Fast Retailing, owner of the Uniqlo brand, managed a modest gain of 0.31%.
However, the broader Topix index, which recently outperformed the Nikkei, also suffered significant volatility, dropping by as much as 3% during the session before recovering to close 1.11% lower at 2,670.72. Tech investment giant SoftBank Group weighed heavily on the Nikkei, falling 2.75%, while banking shares also declined significantly amid easing expectations of aggressive monetary tightening from the Bank of Japan. Mitsubishi UFJ Financial Group and Sumitomo Financial Group each fell 1.4%, and Mizuho Financial Group dropped 3.69%.
Sector-wise, the brokerage and nonferrous metals industries experienced the sharpest declines, losing 2.88% and 2.71% respectively. Key players in the nonferrous metals sector, Fujikura and Furukawa Electric, fell notably by 2% and 4.18%.
Traders should remain vigilant regarding ongoing international developments and potential shifts in monetary policy, as these factors continue to significantly influence market movements.
Market recovery was aided by investor buybacks, encouraged by the reversal of U.S. futures in Asian trading. Shigetoshi Kamada of Tachibana Securities noted that the resilience of Japan’s economic fundamentals motivated investors to reclaim earlier losses. Notably, chip equipment manufacturer Advantest reversed its initial decline, closing 1.69% higher and providing key support to the index. Similarly, Fast Retailing, owner of the Uniqlo brand, managed a modest gain of 0.31%.
However, the broader Topix index, which recently outperformed the Nikkei, also suffered significant volatility, dropping by as much as 3% during the session before recovering to close 1.11% lower at 2,670.72. Tech investment giant SoftBank Group weighed heavily on the Nikkei, falling 2.75%, while banking shares also declined significantly amid easing expectations of aggressive monetary tightening from the Bank of Japan. Mitsubishi UFJ Financial Group and Sumitomo Financial Group each fell 1.4%, and Mizuho Financial Group dropped 3.69%.
Sector-wise, the brokerage and nonferrous metals industries experienced the sharpest declines, losing 2.88% and 2.71% respectively. Key players in the nonferrous metals sector, Fujikura and Furukawa Electric, fell notably by 2% and 4.18%.
Traders should remain vigilant regarding ongoing international developments and potential shifts in monetary policy, as these factors continue to significantly influence market movements.