Nikkei Slips as Tech Weakness Offsets Energy Gains in Tokyo Trading

POLICY WIRE — Tokyo, Japan — Japan’s benchmark Nikkei 225 index retreated on Monday, slipping 0.43 percent to 62,425.47 during morning trading. This decline marks the third consecutive session of losses for the index, putting it on track for its lowest closing level since July 30.

The downward pressure was largely driven by a slump in chip-related equities, which followed a lackluster performance on Wall Street at the end of last week. Despite the broader index’s struggle, market breadth remained positive, with 166 stocks advancing compared to 59 decliners.

Energy-linked shares provided a counterweight to the tech-driven losses, bolstered by rising oil prices. This sector strength mirrors a recent trend in the United States, where the S&P 500 energy sector climbed 2.5 percent to reach a record high.

Oil markets remain sensitive to geopolitical developments, particularly following reports that Qatari mediators traveled to Tehran to discuss de-escalation efforts. These diplomatic moves follow a series of Houthi attacks on Saudi Arabia that had previously heightened concerns regarding global supply stability.

Individual performance within the Nikkei was mixed. Sumco led the decliners with a 4.03 percent drop, putting it on pace for its lowest close since April 2026, while Kokusai Electric and Screen Holdings fell 3.86 percent and 3.78 percent, respectively.

Conversely, energy-related firms saw significant gains. Inpex rose 4.92 percent, JGC Holdings climbed 4.56 percent, and Mitsubishi Corp added 4.28 percent to its value.

Satoshi Saito, a senior analyst at Monex Securities, noted that while the Nikkei shows signs of short-term technical undervaluation, the path to recovery remains uncertain. He suggested that while brief rebounds are possible, various underlying concerns may keep market momentum sluggish for the time being.

Reporting by Policy-Wire (PW)