Tech Tumbles, Japan’s Nikkei on Track for Worst Week Since December 2022

The Nikkei share average in Japan took a nosedive of more than 2% to a three-week low on Friday, marking its worst week since December 2022. The tech sector bore the brunt of the losses, following the downward trend set by Wall Street.

Investors were on edge as they awaited a crucial U.S. jobs report later in the day, with uncertainty looming over the Federal Reserve’s decision on interest rate cuts. The Nikkei plummeted by 2.42%, shedding 961 points to reach 38,812.24 at the midday break, resulting in a weekly loss of 3.86%.

Kazuo Kamitani, an equities strategist at Nomura Securities, attributed the decline to technical factors. The index, which had recently hit an all-time high of 41,087.75 on March 22, saw its 25-day moving average turn downwards on Friday, signaling a potential further drop.

Chip sector stocks, including Tokyo Electron and Advantest, were major contributors to the Nikkei’s fall, with both companies experiencing significant declines. Other notable losers included SoftBank Group and Fast Retailing.

Of the 225 components of the Nikkei, 214 saw declines while only 11 advanced. The broader Topix index also took a hit, with growth shares falling more than value stocks. However, energy shares bucked the trend, with a 0.73% increase driven by rising crude oil prices.

Inpex, an oil refiner, emerged as the Nikkei’s top gainer with a 1.3% jump. The market is expected to remain volatile in the coming week, with all eyes on the 25-day moving average for potential cues on future movements.