Technology Stocks Drag Japanese Stocks into the Red
Newsmaker.id - The Japanese stock market weakened again on Tuesday, with the Nikkei 225 index falling around 0.8% to around 66,700. This decline continued for the second consecutive session, bringing the Japanese benchmark index to its lowest level in a month.
Market pressure increased after tensions in the Middle East escalated. United States President Donald Trump reinstated a blockade on Iranian vessels passing through the Strait of Hormuz, pushing oil prices sharply higher and worsening sentiment toward riskier assets.
The rise in oil prices has sparked renewed concerns about global inflation. This situation increases the likelihood of central banks maintaining high interest rates or raising them further to control price pressures, especially if disruptions in the Strait of Hormuz disrupt global energy supplies.
The Japanese stock market also followed the decline in technology stocks on Wall Street due to concerns about the sustainability of the artificial intelligence rally. Several technology and AI stocks fell, including Kioxia Holdings (1.5%), Taiyo Yuden (2.3%), Murata Manufacturing (3.1%), SoftBank Group (2.2%), and Fujikura (6.7%).
Market Impact:
Nikkei 225: Short-term sentiment remains negative. Pressure could persist if oil prices continue to rise and the sell-off in technology stocks on Wall Street persists.
Japanese technology stocks: Semiconductor, AI, and electronic component manufacturers could face further profit-taking as investors begin to question their high valuations.
Airlines and transportation sectors: Potential pressure as soaring oil prices could increase fuel costs and narrow corporate profit margins.
Japanese Yen: The impact could be mixed. Risk-off sentiment could support the yen as a safe-haven asset, but rising energy import costs could worsen Japan's trade balance and limit its gains.
Gold: Potential support from rising geopolitical tensions and weaker stock markets. However, expectations of rising global interest rates could limit gold price gains. (CP)
