JAKARTA - The Nikkei index fell sharply in Monday morning trading. Pressure came from selling shares of technology, especially shares related to artificial intelligence and semiconductors, after prices soared high in recent times.
According to a Kyodo News report quoted on Monday, June 8, the Nikkei Stock Average index containing 225 stocks had fallen by more than 4 percent. In the morning session, Nikkei weakened 2,547.72 points or 3.83 percent from Friday's closing to 64,040.40.
The Topix index, an index that includes more stocks on the Tokyo Stock Exchange, also fell 104.98 points or 2.66 percent to 3,844.11.
Investors choose to lock in profits. After technology stocks ran fast, some market participants began to sell. On the exchange, sharp gains are often followed by sudden brakes.
Pressure is also coming from the United States. Artificial intelligence and semiconductor stocks in Japan were dragged down by the weakening of similar stocks on Wall Street. Expectations of a rate hike by the Federal Reserve or The Fed, the US central bank, made the market more cautious.
In the foreign exchange market, the US dollar remained strong at around 160 yen in Tokyo. Kyodo News reported that the strengthening of the dollar was supported by speculation on the Fed's interest rate hike. However, the room for strengthening was held back by concerns about possible currency intervention by Japanese authorities, namely government or central bank measures to hold exchange rate movements that are considered too sharp.
At midday, the dollar was trading at 160.38-160.39 yen. The figure was compared to 160.28-160.38 yen in New York and 159.94-159.96 yen in Tokyo on Friday at 17.00.
The euro was at 1.1528-1.1529 dollars and 184.88-184.90 yen. Previously, the euro was at 1.1518-1.1528 dollars and 184.57-184.67 yen in New York, and 1.1632-1.1633 dollars and 186.05-186.09 yen in Tokyo on Friday afternoon.
Market sentiment was also disturbed by uncertainty in the Middle East. Reports of new attacks by Israel, Iran, and the Lebanese Hezbollah group over the weekend made investors more reluctant to take risks.
Maki Sawada, a strategy analyst at the Investment Content Department of Nomura Securities Co., was quoted by Kyodo News as saying that the current pressure would not necessarily change the prospects for semiconductor stocks.
"Demand for semiconductor-related stocks is likely to remain strong, so what we are seeing now seems to be a temporary correction after the recent surge," Sawada said.
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