Japanese markets retreat from record highs as investors book profits in technology stocks

Japanese equities closed sharply lower on Tuesday, with investors booking profits after a strong rally in semiconductor and artificial intelligence-related stocks.

The Nikkei 225 fell 3.6% to close at 69,788, while the broader TOPIX declined 2.6% to 3,990. Both benchmarks pulled back from record highs.

Market sentiment was also affected by overnight weakness on Wall Street, where major US technology stocks came under pressure.

At the same time, investors monitored developments in US-Iran talks. Sentiment received some support after Washington granted Tehran a 60-day licence to sell oil in international markets, raising expectations of a faster recovery in global oil supply.

Technology and semiconductor-related stocks led the declines. Shares of SoftBank Group dropped 10.1%, while Kioxia Holdings slumped 15.1%.

Among other notable movers, Tokyo Electron fell 6.2%, while Ibiden declined 6.6%.

Overall, the market correction reflected profit-taking in high-growth technology stocks after recent gains, alongside cautious sentiment following weakness in global technology shares.

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