FX.co ★ Japanese Shares Struggle for Direction

The Nikkei 225 and Topix indexes remained largely unchanged on Thursday as investors assessed the implications of the U.S. Federal Reserve's latest interest rate cut and reevaluated the sustainability of the artificial intelligence sector. The Fed implemented its third rate reduction for 2025, indicating a more cautious easing approach for the upcoming year. Concerns about the longevity of AI investments were heightened when Oracle's shares dropped over 11% in after-hours trading following disappointing quarterly earnings. This fueled skepticism over the continued robustness of AI-related expenditures. Japanese tech stocks displayed mixed results: SoftBank Group, Lasertec, and Tokyo Electron saw declines ranging from 1.2% to 6.4%, while Kioxia Holdings, Advantest, and Fujikura experienced gains of 0.1% to 4.5%. Local markets also faced downward pressure due to rising expectations of an interest rate hike by the Bank of Japan next week, following Governor Kazuo Ueda's affirmation that inflation is nearing the central bank's target.