FX.co ★ Japanese Shares Track Wall Street Lower

On Wednesday, the Nikkei 225 Index experienced a decline of 1.2%, falling below 54,100, while the broader Topix Index decreased by 0.7%, settling at 3,620. This downturn retraced gains from the previous trading session, influenced by a tech-driven selloff observed on Wall Street. Investor confidence was dampened as focus shifted away from AI-related stocks, fueled by growing worries over significant capital expenditures. Consequently, investment flows moved towards more cyclical sectors. The recent launch of an AI automation tool by Anthropic contributed further to the pressure on software stocks, leading to widespread declines, particularly among legal and data services companies. Domestically, market participants remained cautious, anticipating this weekend’s snap lower house election. The ruling Liberal Democratic Party (LDP) is projected to increase its parliamentary representation, which could pave the way for expansionary fiscal measures under the leadership of Prime Minister Sanae Takaichi. In terms of company performances, notable declines were observed with Advantest falling by 1.1%, Nintendo plummeting 8.7%, Lasertec dropping 7.3%, Disco Corp slipping 1%, and SoftBank Group declining by 3%.