Key facts
- Japan's Nikkei share average fell 1.3% to 63,360.96.
- The Nikkei had previously fallen nearly 3% to below 63,000.
- The broader Topix index declined 1.6% to 3,787.08.
- Chip-related stocks, including SoftBank Group, Fujikura, and Advantest, experienced significant losses.
- Escalating U.S.-Iran tensions contributed to investor caution and a move away from risky assets.
Japan's Nikkei share average experienced a significant decline on Thursday, primarily driven by a sharp selloff in chip-related stocks and heightened geopolitical tensions between the U.S. and Iran. The benchmark index fell 1.3% to 63,360.96, having earlier dropped nearly 3% to below the 63,000 level for the first time since May 22.
The broader Topix index also suffered, sliding 1.6% to 3,787.08. The downturn was exacerbated by renewed U.S. strikes against targets in Iran, following President Donald Trump's threats of further action if a peace deal is not reached. This escalation revived inflation concerns, prompting investors to divest from riskier assets.
Among the notable decliners, tech investment conglomerate SoftBank Group significantly impacted the Nikkei, contributing a 233-point drop and losing 3.6% of its own value. Other technology-focused companies also saw substantial losses, with Fujikura, a producer of optical fiber crucial for AI data centers, shedding 6%, and semiconductor testing equipment manufacturer Advantest declining by 3.7%. Overall, the Nikkei index saw 184 stocks fall against only 40 advancers.