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TOKYO – Following a pause due to a U.S. national holiday, Japan’s Nikkei 225 index took a downturn of approximately 1% on Tuesday, amidst a quiet period in Asia with many markets shut for the Lunar New Year celebrations.
The dip in the Nikkei coincided with a decline in U.S. futures and a mixed performance in oil prices, as well as falling prices for precious metals like gold and silver. The market’s mood in Tokyo was notably affected by weak economic data revealed on Monday.
A significant factor in the Nikkei’s decline was the 6.2% drop in shares of the tech behemoth, SoftBank Group, which contributed to the downward pressure on the broader market. This downturn came after an initial surge following Prime Minister Sanae Takaichi’s ruling party’s decisive victory in the February 8 general election.
Midday trading saw the Nikkei 225 resting at 56,237.65, marking a 1% decrease. It appears that traders were opting to secure profits after the recent rally that propelled the index to record highs. However, the optimism surrounding Takaichi’s economic strategies, which include increased government spending and tax reductions, seems to be waning as her popularity gradually declines in the polls.
Traders likely were locking in profits from the recent gains that took the Nikkei to record levels. Polls show Takaichi’s popularity is slowly slipping, as hopes for economic revival from her plans to increase government spending and cut taxes subside.
In Australia, the S&P/ASX 200 gained 0.3% to 8,964.10, while India’s Sensex edged 0.1% lower. In Thailand, the SET was down less than 0.2%.
European shares ended mixed on Monday and trading in the U.S. was closed for Presidents Day. U.S. markets are set to reopen Tuesday.
On Friday, the S&P 500 edged up less than 0.1% a day after one of its worst losses since Thanksgiving. The Dow Jones Industrial Average rose 0.1%, and the Nasdaq composite slipped 0.2%.
Share prices have been waxing and waning with fluctuations in confidence over massive investments in AI. Investors are also focused on inflation and how price pressures might affect interest rates.
In other dealings early Tuesday, benchmark U.S. crude rose 65 cents to $63.54 a barrel. Brent crude, the international standard, lost 29 cents to $68.36 a barrel.
The U.S. dollar slipped to 153.17 Japanese yen from 153.51 yen. The euro cost $1.1841, down from $1.1852.
The price of gold fell 1.4% and silver was down 3.4%.
Bitcoin fell 0.6% to about $68,500.
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Yuri Kageyama is on Threads: https://www.threads.com/@yurikageyama
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