Tokyo’s financial markets experienced a notable downturn on Tuesday, with the benchmark Nikkei 225 index declining approximately 1% to settle at 56,237.65 by midday. This pullback occurred against a backdrop of limited regional trading activity, as numerous Asian markets remained closed in observance of Lunar New Year celebrations.
The market retreat appears driven by multiple factors, including profit-taking activities following the Nikkei’s recent record-breaking performance. Investor sentiment was further dampened by disappointing economic indicators released Monday and a substantial 6.2% decline in shares of technology conglomerate SoftBank Group, which exerted significant downward pressure on the overall index.
This market correction follows a substantial rally triggered by Prime Minister Sanae Takaichi’s decisive electoral victory on February 8. However, recent polling data indicates diminishing public enthusiasm for the administration’s economic revitalization strategy, which centers on increased government expenditure and tax reduction measures.
Meanwhile, Australia’s S&P/ASX 200 demonstrated modest growth, advancing 0.3% to reach 8,964.10. Conversely, India’s Sensex experienced a slight 0.1% decrease, while Thailand’s SET index registered a marginal decline of less than 0.2%.
Commodity markets presented a mixed landscape, with benchmark U.S. crude oil gaining 65 cents to $63.54 per barrel, while Brent crude, the international standard, declined 29 cents to $68.36. Precious metals faced substantial selling pressure, with gold prices falling 1.4% and silver experiencing a more pronounced 3.4% decrease. Cryptocurrency markets also saw declines, with Bitcoin dropping 0.6% to approximately $68,500.
Currency markets witnessed the U.S. dollar weakening slightly against the Japanese yen, trading at 153.17 yen compared to 153.51 yen previously. The euro also softened against the dollar, declining to $1.1841 from $1.1852.
This market activity follows mixed European trading on Monday and a closure of U.S. markets for the Presidents Day holiday, with American exchanges scheduled to resume operations on Tuesday.