The Nikkei 225 Index experienced a decline on Monday, reversing earlier gains amidst a broader downturn in global markets driven by risk aversion. Precious metal selloffs, concerns about AI investment sustainability, and domestic political factors contributed to the negative sentiment. Technology shares were particularly hard hit, with significant losses across major tech companies, while financial, consumer, and industrial stocks also faced downward pressure.
- The Nikkei 225 Index fell 1.25% to close at 52,655.
- The broader Topix Index lost 0.8% to 3,538.
- The decline was attributed to a selloff in precious metals and concerns about AI investments.
- Technology stocks experienced steep declines, including Kioxia Holdings (-13.4%), Advantest (-4.5%), Lasertec (-14%), SoftBank Group (-3.6%) and Disco Corp (-5.9%).
- Prime Minister Sanae Takaichi suggested a weak yen could benefit export industries.
- Investors are anticipating the Feb. 8 snap lower house election.
The Nikkei’s recent performance reflects a confluence of factors, both international and domestic. Global economic anxieties surrounding precious metals and the long-term viability of AI investments have created a risk-off environment impacting the market. Furthermore, internal dynamics, such as political developments and governmental perspectives on currency valuation, add complexity to the investment landscape. This suggests a period of potential volatility for the Nikkei, influenced by both external market forces and internal economic and political considerations.