Japan’s Nikkei fell at the largest pace since the end of January

Japanese indices experienced a decline in trading on Thursday, March 7, driven by a downturn in chip-related stocks and a strengthening yen.

The Nikkei index closed approximately 1.2% lower at 39,598 points, marking its largest decline since January 26, following a record high of 40,472 points, mirroring gains seen on Wall Street the previous night. Similarly, the Topix index decreased by 0.4% to 2,718 points.

Notably, Tokyo Electron shares led the losses on the Nikkei Index with a decline of around 3.9%, while Advantest shares saw a loss of 4.5%. Conversely, stocks in the financial sector saw gains, with Mitsubishi UFJ Group shares rising by approximately 0.5%.

Bank of Japan Board Member Junko Nakagawa commented that the economy is progressing steadily towards achieving the bank’s inflation target of 2%.

These remarks coincided with a report from Japanese news agency Jiji Press on Wednesday, suggesting that some members of the Bank of Japan’s board of directors may advocate for raising negative interest rates at the upcoming policy meeting this month. This speculation contributed to the yen strengthening to its highest level against the dollar in a month.