Japan’s Nikkei falls as tech stocks drag; Astellas rises

Japan’s Nikkei stock fell on Thursday, dragged down by technology stocks on persistent valuation concerns, joining a broader slump in Asian markets on concerns about the exploding costs of AI investments.The benchmark Nikkei 225 Index fell 0.9% to 53,818.04. The broader, less tech-intensive Topix fell a more moderate 0.1% to 3,652.41.

SoftBank Group fell 7% after affiliated chip design firm Arm Holdings failed to meet analysts’ expectations on licensing revenue.

“Chip-related stocks are expected to be weak as concerns rise in the US over rich valuations and AI investments,” said Takayuki ‍Miyajima, senior economist at Sony Financial Group.

“But in Japan, selective buying linked to profits is likely to continue.”

Semiconductor-related stocks fell in early trading in Tokyo, with chipmaker Rohm falling 9.1% to become the biggest percentage loser on the Nikkei, while sector supplier Advantest fell 4.8% and chipmaker Disco fell 4.4%.

There were 137 advancers on the Nikkei index, compared to 88 decliners – evidence of the outsized influence of a handful of big tech names.

The pharmaceutical sector was the best performer among the Tokyo Stock Exchange’s 33 industrial groups, led by Astellas Pharma’s 10% rise after the company raised its net profit forecast for this fiscal year by nearly five times.