Japan’s Nikkei 225 share average reversed gains on Thursday after briefly surpassing the key 60,000 level, as investors moved to lock in profits following an early surge fueled by technology stocks and optimism surrounding an extended Iran-U.S. ceasefire. Despite the initial rally, market sentiment weakened amid lingering geopolitical concerns and softer U.S. stock futures, prompting a pullback in Japanese equities.
The Nikkei index dropped 1.06% to close the morning session at 58,952.11, retreating from its record high of 60,013.98 reached earlier in the day. The broader Topix index also declined by 1.2% to 3,700.1, reflecting widespread selling across the Tokyo Stock Exchange.
Investor confidence had been supported by news that U.S. President Donald Trump agreed to extend the ceasefire with Iran indefinitely following mediation efforts by Pakistan. However, uncertainty remains in the Middle East, as tensions persist with the U.S. Navy maintaining a blockade of Iranian ports and Iran reportedly seizing two vessels in the Strait of Hormuz. These developments continue to impact oil prices and global market stability.
Market analysts noted that while optimism over easing conflict initially boosted stocks, further gains may depend on stronger economic fundamentals and improved domestic demand. The rally in Japanese equities has largely been driven by a narrow group of AI-related and semiconductor stocks, including SoftBank Group and Advantest, raising concerns about market breadth.
The NT ratio, which compares the Nikkei 225 to the Topix, recently hit a record high, highlighting the uneven performance between large-cap tech stocks and the broader market. During Thursday’s session, chip-related shares lost momentum, with Advantest and Tokyo Electron slipping slightly, while SoftBank Group trimmed gains but remained higher.
Out of approximately 1,600 stocks listed on the Tokyo Stock Exchange’s prime market, only 23% advanced, while 72% declined, signaling cautious investor behavior. The combination of profit-taking, geopolitical risks, and weaker global cues contributed to the market’s volatile performance.


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