FX.co ★ Nikkei Slips on Trade, Election Jitters but Closes Week Higher

On Friday, the Nikkei 225 decreased by 0.2%, closing at 39,819, while the broader Topix index experienced a similar 0.2% decline, ending at 2,834. This downturn erased early gains achieved during the morning trading session. The Nikkei retracted from its peak over the past two weeks, established a day prior, as market activity remained volatile ahead of the impending Upper House election this weekend. Investor sentiment was further dampened by uncertainties surrounding trade discussions with the United States, set against an August deadline, compounded by disappointing trade data for June that revealed a significant reduction in exports to the US. Nonetheless, softer inflation figures helped mitigate the downturn, fostering optimism that the Bank of Japan may maintain current interest rates during its forthcoming policy meeting. The technology sector suffered the most significant declines, with notable losses seen in electronic tech stocks such as Sony Group, which dropped by 2.2%, and Keyence Corp, decreasing by 0.6%. Disco Corp led the downward trend with an 8.8% plunge, while Advantest fell by 4.4%. Despite the day's setbacks, the Nikkei managed a 0.4% gain for the week, recovering from losses suffered in the prior week.