Japan's Nikkei slips as chip shares pressured by AI capex caution
TOKYO: Japan’s Nikkei share average declined on Thursday as chip-sector shares gave back the previous session’s gains, with investors cautious about the outlook for AI-related spending next year. Despite posting overall solid results after Wednesday’s Wall Street close, US chip equipment maker Lam Research shares slipped in extended trading, with Iwai Cosmo Securities analyst Kazuyoshi Saito…
Japan's Nikkei share average slipped on Thursday as chip-sector shares retreated from the previous day's gains, amid investor skepticism surrounding AI-related spending in the coming year. Even though the index exhibited robust performance following the close of Wall Street trading on Wednesday, US chip equipment firm Lam Research shares slipped in after-hours trading, according to Iwai Cosmo Securities analyst Kazuyoshi Saito.
Saito cited concerns over demand from China, noting that the market may not have fully factored in the anticipated benefits from easing regulations. The tech-focused Nikkei fell 0.8% to 64,128.54 by 0137 GMT, after surging 0.9% the previous day. Conversely, the broader Topix index remained unchanged on Thursday, after climbing 0.9% on the prior session.
Among the 33 industry groups in the Tokyo Stock Exchange, services emerged as the top performer, climbing 2.2%. Analysts attributed the recent decline in Japanese stocks to profit-taking following strong after-market earnings releases from US companies SpaceX and Super Micro Computer on Tuesday. Wataru Akiyama, an equities strategist at Nomura Securities, highlighted the prevailing caution among investors, questioning whether AI capex will persist, and expressed uncertainty about the market's outlook for 2027.
Chip-sector shares were the primary drivers behind the Nikkei's decline, with Tokyo Electron falling 4.1%, causing a 212-point drop in the index due to its substantial weight. Screen Holdings plummeted by 6%, while Lasertec decreased 2.7%. Additionally, Fujikura, a data-center cable manufacturer, lost 3%. AI-focused startup investor SoftBank Group also experienced a 3.1% decline.
Despite these setbacks, several other tech-related companies managed to advance. Cybersecurity firm Trend Micro experienced a 6.6% increase following the disclosure of critical vulnerabilities in the PHP programming language, prompting several European governments to temporarily take their websites offline for protection. IT services provider SHIFT rose 9%, posing as the Nikkei's highest percentage gain, while IT consultancy BayCurrent climbed 5.9%. Sony experienced a 2.6% rise.
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