FX.co ★ Japanese Shares Decline on Profit-Taking

On Thursday, the Nikkei 225 index fell by 0.7% to approximately 38,600 points, while the broader Topix Index declined by 0.6% to 2,791 points. This movement marked the end of a three-day rally, as investors chose to secure profits amidst heightened global uncertainties. In the United States, the Federal Reserve maintained interest rates, with officials adopting a cautious approach due to apprehensions regarding the inflationary consequences of tariffs imposed by President Donald Trump. Geopolitical tensions also weighed heavily on the market, as the ongoing conflict between Israel and Iran increased concerns about potential U.S. escalation in the Middle East. Within Japan, attention shifted to forthcoming inflation data which might influence the Bank of Japan's future monetary policy. Earlier in the week, the central bank left its interest rates unchanged and indicated a gradual strategy for shrinking its balance sheet, maintaining a cautious trajectory towards policy normalization. Leading decliners included Advantest, down 1.6%; Disco, declining 2.1%; Tokyo Electron, dropping 2%; Sony Group, falling 2.6%; and Kawasaki Heavy Industries, which decreased by 3.4%.