Japan’s Nikkei Stock Average Snaps 4-Session Winning Run as Record Valuations Prompt Profit-Taking (UPDATE 1)

Reuters

12:16 JST, October 8, 2025 (updated at 16:38 JST)

TOKYO, Oct 8 (Reuters) – Japan’s Nikkei share average snapped a four-session winning streak on Wednesday, as profit-taking after a run-up to record levels outweighed optimism over a potential increase in stimulus.

The Nikkei 225 Index .N225 struggled for direction for much of the session before closing 0.45% lower at 47,734.99. The broader Topix .TOPX rose 0.2% to an all-time high of 3,235.66.

The Nikkei logged a record close at 47,950.88 on Tuesday, riding the momentum from the weekend election of Sanae Takaichi as leader of the ruling Liberal Democratic Party.

Takaichi, now poised to become Japan’s next prime minister, has advocated for looser fiscal and monetary policies, as well as targeted investment in sectors including defense, artificial intelligence and semiconductors.

“If we look at some of the companies that have been going up, it looks like it’s more expectations than fundamentals,” said Kei Okamura, managing director at asset manager Neuberger Berman in Tokyo. “It’s a little frothy, for sure.”

Exporter shares were also buoyed by a sharp slide in the yen, trading at its weakest against the dollar since February.

Within the Nikkei index, 100 stocks advanced and 122 retreated. The 14-day Relative Strength Index (RSI) started the session at 77, remaining above the 70-mark threshold that signals an overheated market.

“Given this rapid pace of ascent, we believe conditions are ripe for profit-taking,” said Nomura Securities strategist Maki Sawada.

The largest percentage gainers on the index were heavy machinery maker IHI Corp 7013.T, up 6.3%, followed by software company SHIFT 3697.T, which gained 5.36%.

The biggest drag on the Nikkei, in terms of index points, were SoftBank Group 9984.T, which slid 2%, and chip-sector heavyweight Tokyo Electron 8035.T, down 2.8%.