Reuters

Japan’s Nikkei Stock Average Slips 1% from Record as Investors Book Profit (UPDATE 1)

Yomiuri Shimbun file photo
The Tokyo Stock Exchange

Reuters

12:58 JST, January 7, 2026 (updated at 16:56 JST)

TOKYO, Jan 7 (Reuters) – Japan’s Nikkei share average fell 1% on Wednesday as investors booked profits after a rally that took the gauge to a record close in the previous session.

The Nikkei .N225fell 1.06% to 51,961.98, while the broader Topix .TOPX slipped 0.77% to 3,511.34.

The Nikkei rose 4% in the first two sessions of the year, notching a record closing high on Tuesday.

The market also weighed the impact of China’s ban on exports of dual-use items to the country.

“China’s export ban was a negative cue, but overall, investors sold stocks as the market rose sharply in the past two sessions,” said Naoki Fujiwara, senior fund manager at Shinkin Asset Management.

“But the money was circulating. The selloff was focused on large stocks, and smaller shares were firm.”

The Topix’s small-cap index .TOPXS edged up 0.39%. Some 55% stocks on the Tokyo Stock Exchange’s (TSE) prime market rose, while 41% fell and 3% traded flat.

China has banned exports of dual-use items to Japan that can be used for military purposes, according to its Commerce Ministry statement on Tuesday.

Dual-use items are goods, software or technologies that have both civilian and military applications, including certain rare earth elements that are essential for making drones and chips.

Automakers Toyota Motor 7203.Tand Honda Motor 7267.T fell more than 2% each.

Shares of Toyo Engineering6330.T, a developer of offshore rare-earth extraction technology, surged almost 20% to an exchange-imposed daily limit high of 4,285 yen on Wednesday.

On the other hand, chip-testing equipment maker Advantest 6857.T fell 4.4% to drag down the Nikkei the most.

Uniqlo brand owner Fast Retailing 9983.T declined 2.74%.

Hisamitsu Pharmaceutical 4530.Talso surged 19.23% to a daily limit high of 6,200 yen after the company said it was planning to take the company private in a management buyout for nearly 400 billion yen ($2.55 billion).