Tokyo stocks fall as higher oil prices trim AI, chip gains

Tokyo stocks experienced a decline on Wednesday, as higher crude oil prices dampened earlier gains from artificial intelligence and semiconductor-related shares. The Nikkei Stock Average, comprising 225 issues, closed 126.55 points, or 0.19 percent, lower at 65,142.78. The broader Topix index dropped 3.69 points, or 0.09 percent, to 4,046.64.

Among the top-tier Prime Market, securities houses, services, and retail stocks were among the main decliners. The U.S. dollar experienced a brief weakness to the upper 152 yen range in Tokyo, with Bank of Japan rate hike speculation driving yen purchasing power, while rising Middle East tensions fueled dollar buying. Certain technology shares, particularly cable manufacturers, saw an uptick following Verizon Communications Inc.'s announcement of a multi-billion dollar deal with Corning Inc. for high-density optical fiber and connectivity solutions.

Despite the morning's strong performance, Tokyo stocks turned negative in the afternoon, as investors cashed in profits on some heavyweight technology shares. Nomura Securities Co.'s strategist, Maki Sawada, noted that the market had already accounted for a Bank of Japan rate hike at its September policy meeting. Consequently, the focus has shifted to whether the BOJ will maintain its policy of one rate hike every three months or signal a readiness to implement consecutive rate hikes depending on the situation after September.