FX.co ★ Japanese Shares Retreat on Profit Taking

On Thursday, the Nikkei 225 index declined by 0.5% to a level approaching 43,000, while the wider Topix index experienced a 0.9% drop to 3,065. This downturn in Japanese stocks marked a retreat from their record highs, as investors engaged in profit taking. Earlier in the week, the market had seen gains fueled by the optimism of a potential interest rate cut by the Federal Reserve next month, following softer US inflation figures. The confidence was further bolstered by robust corporate earnings reports in Japan and an optimistic outlook for global trade. Meanwhile, the Bank of Japan is under increasing pressure to reconsider an inflation measure linked to domestic demand and wage growth, which has, up until now, limited any further monetary tightening. Among the major stocks, Mitsubishi Heavy fell by 5.2%, IHI Corp by 2.2%, Sony Group by 1.7%, and Tokyo Electron by 1.1%. In contrast, SoftBank Group surged by 5.2% to reach new record highs.