Markets

Japan’s Nikkei Ends at 5-month Low as Chip Stocks Track Nvidia Slump (Update 2)

Yomiuri Shimbun file photo
Tokyo Stock Exchange

Reuters

10:15 JST, February 28, 2025 (updated at 16:10 JST, Feb. 28)

TOKYO (Reuters) — Japan’s Nikkei share average ended at a five-month low on Friday, as chip-related stocks tracked Nvidia’s sharp overnight declines, with Advantest tanking nearly 9%.

The Nikkei index fell below 37,000 for the first time since September 19 and hit a low of 36,840.12 in intraday trade.

The index closed 2.88% lower at 37,155.5, its lowest close since September 19, in its biggest daily fall since September 30.

The broader Topix lost 1.98% to 2,682.09.

The S&P 500 and Nasdaq ended sharply lower overnight, weighed down by an 8.5% slump in chipmaker Nvidia after its quarterly report failed to rekindle Wall Street’s AI rally, while investors focused on data pointing to a cooling U.S. economy.

Investors had some hope on chip-related shares after seeing Nvidia’s outlook in the previous session, but they dumped those today after seeing the market reaction to Nvidia, said Seiichi Suzuki, chief equity market analyst at Tokai Tokyo Intelligence Laboratory.

Japanese chip-related stocks, key components of the index, showed mixed movements in the last session, as they awaited Nvidia’s performance on Wall Street. The Nikkei gained 0.3% on Thursday.

Overnight, Nvidia tumbled 8.5% after the Silicon Valley company gave a weaker-than-expected quarterly forecast for gross margin that overshadowed an upbeat revenue outlook.

In Japan, chip-testing equipment maker Advantest, a supplier to Nvidia, tanked 8.78% to drag Nikkei the most. Chip-making equipment maker Tokyo Electron slipped 4.45%.

Fujikura, which makes cables for data centers, slipped 7.32%, while its peer Furukawa Electric lost 5.9%.

Nikkei’s gains this year have been capped by worries about the impact of U.S. President Donald Trump’s tariff threats and concerns about the Bank of Japan’s interest rate policy.

Today, the market had another blow, said Suzuki.

But the losses of the Topix are smaller than the Nikkei’s. So the question is whether we see the Nikkei index or Japanese equities overall.

Convenience store operator Seven & I Holdings 3382. rose 1.23% to become one of the 20 stocks that rose on the Nikkei, after tanking 11.7% in the previous session.

Of the 225 components on the index, 203 stocks fell and two were flat.