FX.co ★ Japanese Shares Dip on Profit-Taking

On Wednesday, the Nikkei 225 Index experienced a marginal decline of 0.1%, settling around 38,150, while the more comprehensive Topix Index dropped by 0.4% to 2,761. This downturn followed earlier gains earlier in the week as investors opted to take profits after a robust surge. Despite this, Japanese equities have managed to recover all losses incurred since the early April announcement by former US President Donald Trump regarding extensive reciprocal tariffs. This recovery is largely attributed to ongoing trade discussions and a temporary alleviation of tariffs between the US and China, which have positively influenced market sentiment. Recent economic data revealed a 4% year-on-year increase in Japan's producer prices for April, a slowdown from the 4.2% recorded in March, marking the lowest growth rate since December. The day's losses were primarily driven by leading industrial and automotive firms, such as Kawasaki Heavy (-1%), Mitsubishi Heavy (-1.2%), Sony Group (-3.2%), and Toyota Motor (-1.9%). Conversely, the technology sector outperformed, reflecting positive trends seen on Wall Street. Noteworthy gainers included Disco with an 8.3% rise, Advantest up by 4%, and Tokyo Electron recording a 2.2% increase.