Japan’s Nikkei closed below 38,000 points for the first time since February

Japan’s Nikkei index fell for the third day in a row on Wednesday, closing below 38,000 points for the first time in two months, as tension in the Middle East affected morale and investors took profits before the corporate results announcement season reached its peak.

The Nikkei index closed down 1.3 percent at 37,961.80 points, the lowest closing level since February 14. The index is on track to suffer its largest weekly loss since December 2022.

The broader Topix index fell 1.3 percent to 2,663.15 points.

The main index opened higher, but failed to maintain its gains as caution prevailed in trading, as happened throughout the week, due to the uncertainty surrounding developments in the situation in the Middle East.

Analysts say that caution dominates investor trading at the same time with the start of the season for announcing corporate financial results in Japan, and large companies such as Advantest, a manufacturer of chip testing equipment, are scheduled to announce their results next week.

The performance of US stocks was mixed overnight on Tuesday as Treasury yields continued to rise, giving the Nikkei index only a little support.

Federal Reserve Chairman Jerome Powell said on Tuesday that monetary policy must remain under tightening for a longer period, dashing hopes of implementing significant interest rate cuts this year.

The Nikkei index suffered significant losses, with only 32 of the 225 companies listed on it rising, and chip-related companies led the losses.

Advantest shares fell 4.5 percent, while Lasertec shares fell 7.9 percent and Tokyo Electron shares fell 1 percent.

Fanuc shares fell 3.3 percent, while shares of SoftBank Group, which invests in startups focused on artificial intelligence, fell 1.3 percent.

Among the few winners was Resonac Holding Company, whose shares jumped 12 percent after the chemical company raised its 2024 revenue forecasts.