Japanese Stocks Fall Ahead of Election Today
Japanese stocks weakened ahead of this weekend's snap lower house election, prompting market participants to adopt a defensive stance while awaiting political direction and a wave of corporate performance releases. Risk-off sentiment emerged as investors reduced positions in volatility-sensitive stocks, particularly the technology sector.
At the close of trading on Thursday, the Topix index fell slightly by around 0.1% to 3,652.41, while the Nikkei index fell further, by around 0.9% to 53,818.04. These movements reflect the market's "wait-and-see" approach ahead of election day.
The greatest pressure came from technology-related stocks. SoftBank Group was the main negative contributor, falling around 7%, dragged down by sentiment after its Arm Holdings sales projections were deemed disappointing to investors—reducing risk appetite for the AI/tech theme.
Domestically, political factors also dampened buying interest. Prime Minister Sanae Takaichi scheduled elections for February 8 as a measure to strengthen the coalition's mandate. However, ahead of a crucial moment like this, markets typically reduce exposure because the risk of a surprise election result could trigger rapid movements in the yen, bonds, and stocks.
Furthermore, corporate performance reports also weigh on the index. Rohm shares, for example, plummeted around 9% after their outlook was deemed less than convincing and third-quarter operating profit was reported below analysts' average expectations—adding pressure on Japanese chip stocks.
Essentially, the Japanese stock market is in a "stress test" phase: elections and earnings are a combination that makes investors more selective. If the election result provides certainty about policy direction, the market has a chance of stabilizing—but if fiscal/aggressive signals emerge that trigger volatility in the yen and yields, the pressure on stocks could continue. (asd)
Source: Newsmaker.id
