Japanese stocks declined on this trading day, with the Nikkei 225 index falling 1,315.00 points (1.92%) to close at 67,242.73, dragged down by sharp losses in artificial intelligence and semiconductor-related stocks. The decline intensified after South Korea's KOSPI index plunged over 8%, weighing on investor sentiment across the region. Daiwa Securities chief strategist Hirogo Tsuboi noted that the KOSPI index drop placed pressure on investment psychology, prompting a defensive rotation into banking stocks as investors awaited upcoming earnings reports from major AI and semiconductor companies scheduled for later this week.
Nikkei 225 Reverses Intraday Gains to Close 1.92% Lower
The Nikkei 225 index initially rose during morning trading, recovering to the 69,000 level, before reversing course to close at 67,242.73. The Topix index declined 28.59 points (0.71%) to finish at 4,007.49. According to Yonhap Infomax World Stock Index, the market's downturn accelerated in tandem with the KOSPI's steep decline, which particularly affected semiconductor-heavy portfolios.
Semiconductor Stocks Tumble as Investors Rotate to Bank Shares
Semiconductor-related stocks bore the brunt of selling pressure near the close of trading. Kioxia's share price plummeted nearly 11%, while Advantest and Tokyo Electron dropped more than 3% and 2% respectively. Ibiden fell over 7%, and Taiyo Yuden crashed nearly 19%.
In contrast, banking stocks attracted strong inflows. Mitsubishi UFJ Financial Group rose more than 2% by the close, while Sumitomo Mitsui Financial Group and Mizuho Financial Group both gained over 1%. Takehiko Masuzawa, head of equity trading at Phillip Securities, stated that "investors are buying bank stocks with confidence amid growing concerns about geopolitical risks." Kohei Onishi, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities, explained that "bank stocks tend to absorb buying funds amid fatigue from purchasing AI-related stocks because they are concentrated in themes and valuations are not overheated."
ASML and TSMC Earnings Scheduled for Mid-Month
Market participants are closely monitoring whether an AI-related rally could reignite ahead of ASML Holdings' second-quarter earnings announcement scheduled for the 15th and Taiwan Semiconductor Manufacturing Company's (TSMC) results due on the 16th. According to market forecasts from financial information providers Quick and FactSet, ASML's revenue is expected to increase 16% year-over-year, with net profit also rising 16%. TSMC's net profit is projected to surge 57%.
Kazuyoshi Saito, chief analyst at Iwai Cosmo Securities, stated: "If ASML's solid earnings and future outlook show that there is no downward trend in AI data center investment, it could serve as a catalyst for a recovery in semiconductor stock gains."
TSMC Reports 67.9% Revenue Surge in June
TSMC's June consolidated revenue reached 442.68 billion Taiwan dollars, marking a 67.9% increase compared to the same period last year. This represents the largest year-over-year revenue growth recorded so far this year.
Japanese Government Bond Yields Show Mixed Movement
Japanese government bond yields displayed mixed trading patterns. According to Yonhap Infomax overseas interest rate data as of 3:40 PM, the 10-year bond yield rose 2.37 basis points from the previous session to 2.7858%. The 30-year bond yield declined 1.53 basis points to 3.9068%, while the 2-year yield increased 1.52 basis points to 1.4422%.
Multiple sources reported that the Japanese government is examining ways to expand domestic investment within the allowable fluctuation range of its portfolio, but clarified that such measures would not immediately lead to revisions of the Government Pension Investment Fund's (GPIF) medium-term management objectives.
FAQ
What caused the Nikkei 225 index to fall on this trading day?
The Nikkei 225 index fell 1,315.00 points (1.92%) to 67,242.73, primarily due to a sharp decline in AI and semiconductor-related stocks. The decline was amplified by South Korea's KOSPI index dropping over 8%, which pressured investor sentiment across the region.
Which semiconductor stocks experienced the largest declines?
Taiyo Yuden crashed nearly 19%, making it the worst performer among semiconductor stocks. Kioxia plummeted nearly 11%, Ibiden fell over 7%, Advantest dropped more than 3%, and Tokyo Electron declined more than 2% by the close of trading.
When are ASML and TSMC scheduled to release their earnings?
ASML Holdings is scheduled to announce its second-quarter earnings on the 15th, while Taiwan Semiconductor Manufacturing Company (TSMC) will report its results on the 16th. Market forecasts project ASML's revenue and net profit to increase 16% year-over-year, while TSMC's net profit is expected to surge 57%.
