Japan’s Nikkei Stock Average Falls for Third Session on Corporate Outlook Concerns (UPDATE 1)

Reuters

12:13 JST, July 29, 2025 (updated at 17:00 JST)

TOKYO, July 29 (Reuters) – Japan’s Nikkei share average ended lower for a third straight session on Tuesday, as concerns over the domestic corporate outlook led investors to lock in profits from a recent rally.

The Nikkei .N225 fell 0.79% to 40,674.55. The broader Topix .TOPX declined 0.75% to 2,908.64.

Japan is in the middle of its earnings season, and investors are cautious as a 15% tariff to be imposed on its exports to the United States could hit corporates, said Hiroyuki Ueno, chief strategist at Sumitomo Mitsui Trust Asset Management.

The tariff, part of the trade deal Japan struck with the U.S. last week, is lower than the 25% that U.S. President Donald Trump had earlier threatened to impose on the country.

That, and expectations that Prime Minister Shigeru Ishiba would step down sent the Nikkei to its highest level in a year last week, Ueno said.

“The market hoped someone who promotes measures to stimulate the economy would replace him (Shigeru Ishiba),” he said.

Ishiba vowed to remain in his post after his ruling coalition suffered a bruising defeat in upper house elections, prompting some in his own party to doubt his leadership as the opposition weighed a no-confidence motion.

On Tuesday, chip-related stocks led the decline, with Lasertec 6920.T falling 8.3% to become the worst performer on the Nikkei.

Tokyo Electron 8035.T fell 1.2% to become the biggest drag for the Nikkei. Advantest6857.T slipped 1%.

Nitto Denko6988.T fell 3% after the industrial materials maker posted a 16% decline in quarterly operating profit.

All but seven of the Tokyo Stock Exchange’s 33 industry sub-indexes fell. The auto sector ITEQP.T lost 1.83% to become the worst performer.

Bucking the trend, Nomura Research4307.T jumped 8.33% after the consulting and IT solutions provider reported a 17% rise in quarterly net profit.