Japanese Stocks Fall as Chip Industry Weighs Down Market
Japanese stocks faced a decline on Friday, primarily driven by the semiconductor sector’s weakness following disappointing earnings from chip giant TSMC. The benchmark Nikkei 225 index dropped by 0.57 percent, or 186.27 points, closing at 32,304.25. On the other hand, the broader Topix index experienced a slight uptick, gaining 0.06 percent, or 1.30 points, to reach 2,262.20.
Investors began to offload semiconductor stocks after TSMC revealed its projected 10 percent decline in sales for the year, alongside delays in starting production at a planned factory in the United States. This news has added to the headwinds that global semiconductor shares have been facing, especially after their initial surge earlier this year, driven by the expectation of increased demand for chips due to advancements in artificial intelligence.
Despite these challenges, the market maintained some support from bargain-hunting activities. Chihiro Ota of SMBC Nikko Securities noted that the condition remained difficult, with semiconductor stocks declining on one hand while witnessing a resurgence in dip-buying when share prices fell.
In the upcoming week, investors will pay close attention to US corporate earnings and the policy meetings of the central banks in the United States, Europe, and Japan. The US Federal Reserve and the European Central Bank are anticipated to raise rates, while the Bank of Japan (BoJ) is expected to maintain its super easy monetary policy, despite previous speculation regarding slight adjustments towards tightening.
Several major shares experienced notable changes. Tokyo Electron, a company manufacturing tools for semiconductor production, witnessed a 5.62 percent slump, closing at 19,300 yen. Similarly, Advantest, a semiconductor testing equipment manufacturer, plunged by 5.79 percent, ending at 19,775 yen. SoftBank Group also faced a decline of 0.74 percent, reaching 6,946 yen, whereas Fast Retailing, the company behind the Uniqlo brand, dropped 0.88 percent to settle at 33,860 yen.
On the other hand, Toyota saw a marginal increase of 0.02 percent, closing at 2,287.5 yen. Japan Airlines experienced a 0.49 percent gain, reaching 3,070 yen, and Sony Group rose by 0.31 percent to close at 13,115 yen.
The market’s downturn reflects the challenges faced by the semiconductor industry and the subsequent impact on Japanese stocks. While chip manufacturers like TSMC struggle with weaker earnings and factory delays, investors are closely monitoring the situation and seeking opportunities for bargain purchases. As the week progresses, the focus will shift to US corporate earnings and monetary policy decisions by major central banks, which are likely to influence market sentiment and further shape the trajectory of Japanese stocks.
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