FX.co ★ Japanese Stocks Decline on Profit-Taking

On Friday, the Nikkei 225 experienced a decline of 0.4%, settling just below the 41,700 mark, while the Topix Index saw a 0.6% decrease, closing at 2,960. This downturn was largely due to investors locking in profits after a significant rally that had recently propelled both indexes to record highs. Despite this retreat, both benchmarks are still poised to achieve weekly gains exceeding 4%, driven by optimism surrounding the new US-Japan trade agreement. This accord ensures that Japanese exports to the US will incur a 15% tariff, significantly lower than the 25% tariff previously threatened by President Trump, thus alleviating some trade-related concerns. Economically, Tokyo's core inflation for July fell slightly below forecasts, yet remained well above the Bank of Japan's 2% target, reinforcing expectations for another interest rate hike later in the year. In corporate developments, Shin-Etsu Chemical took a steep plunge of nearly 10% following the release of a less favorable profit outlook for fiscal year 2025. Other significant decliners included Lasertec, Toyota Motor, and Keyence, each dropping by approximately 1.5% to 1.7%.