tokyo stocks slip: is the semiconductor rally losing steam?
tokyo, Thursday, 19 June 2025.
the tokyo stock exchange faced a downturn. The Nikkei average fell by 1.02% to 38,488.34 yen. This decline marks the first in four days. Profit-taking in semiconductor stocks like Tokyo Electron and Advantest drove the slump. These stocks had seen a recent rally. escalating tensions in the middle east added to the market’s woes. the drop signals a possible slowdown in the tech-driven market surge. Previously, the Nikkei had risen for three consecutive days. It had gained approximately 1000 yen.
market overview
The Tokyo Stock Exchange (TSE) experienced a decline on Thursday, with the Nikkei average closing at 38,488.34 yen, a decrease of 1.02% [1]. This marks a reversal after a three-day winning streak [1]. The downturn was primarily attributed to investors taking profits on high-priced semiconductor stocks, such as Tokyo Electron and Advantest [1]. Simultaneously, escalating tensions in the Middle East contributed to broader market unease, influencing investor sentiment [1][3]. The TOPIX index also fell, decreasing by 0.58% to 2792.08 [1].
semiconductor sector impact
Semiconductor stocks, which had been leading the market’s recent gains, faced significant selling pressure [1]. This profit-taking indicates that investors may be re-evaluating the sector’s near-term growth potential after a substantial rally [1]. According to Reuters, the market is susceptible to the movements of semiconductor-related stocks [3]. The decline in these shares suggests a possible fatigue in the technology-led market rise that had previously propelled the Nikkei to four-month highs [2]. Investors are advised to monitor global semiconductor trends for further cues [3].
geopolitical concerns
Geopolitical risks, particularly escalating tensions in the Middle East, further dampened market sentiment [1]. Asset Management One’s senior strategist, Hitoshi Asaoka, noted that the U.S. market holiday exacerbated the situation, leading to increased selling amid Middle East unease [1]. Fluctuations in the Nikkei futures reflected the market’s sensitivity to Middle East headlines [1]. Initial reports of potential talks between Iran and the U.S. briefly eased selling pressure, but renewed concerns about possible Iranian attacks quickly triggered another wave of selling [1].
investor sentiment and market outlook
Market participants are closely watching how the Nikkei holds above the 39,000 yen level [4]. Reuters suggests the yen’s weakness may provide some support, potentially limiting significant declines [3]. However, Monex Securities anticipates a lower start for the Japanese market due to the U.S. stock decline, particularly impacting semiconductor stocks [4]. Given the intertwined factors of profit-taking and geopolitical uncertainty, investors should remain vigilant and consider a diversified approach [3]. The estimated value of shares traded on the tokyo prime was 3.6462 trillion yen [1].