FX.co ★ Japanese Shares Pull Back From Record Highs

The Nikkei 225 Index dropped 1.5% toward 67,000 on Thursday, while the broader Topix Index fell 0.8% to 3,964, as Japanese equities pulled back from record highs amid renewed tensions between the US and Iran. The latest escalation dampened hopes for a peace agreement and pushed energy prices higher, keeping inflation and interest-rate risks in focus.

Japanese shares also tracked US futures lower after a downbeat outlook from US chipmaker Broadcom weighed on the global technology sector. At the same time, billionaire investor Ray Dalio warned that the rapidly expanding artificial intelligence market is showing bubble-like characteristics that could eventually reverse.

Technology and AI-linked stocks led the declines in Japan, with notable losses in SoftBank Group (-7.8%), Kioxia Holdings (-1%), Fujikura (-6.1%), Murata Manufacturing (-2.9%), and Furukawa Electric (-4.4%).