Japan's Nikkei Index Eases from Record High as AI Stock Rally Fades Amid Strong Wage Growth Japan's Nikkei 225 Index retreated on Friday, marking a second consecutive session of declines after hitting a record high earlier in the week. The benchmark index closed at 66,588.12, a 1.3% drop, while the broader Topix fell 0.07% to 3,949.09. The Nikkei had surged to an all-time peak of 68,402.13 on Wednesday, reflecting a year-to-date gain of 34%. The decline followed a slowdown in the technology sector, which had driven much of the market's recent rally. The downturn in tech stocks coincided with a broader shift in investor sentiment. U.S. markets also saw the Nasdaq close lower overnight after chipmaker Broadcom missed revenue expectations, tempering enthusiasm over AI-driven investments. This development contributed to a cooling of the AI stock euphoria that had fueled the Nikkei's ascent earlier in the year. Despite the tech sector's pullback, positive data on real wage growth in Japan provided some support to the broader market. Real wages rose 1.9% in April, marking a fourth consecutive month of gains. This trend is seen as a key driver of consumer confidence and spending, which in turn bolsters corporate earnings. "While AI and semiconductor-related stocks are down today, we're seeing gains across a broad range of other sectors and stocks," said Wataru Akiyama, an equities strategist at Nomura Securities. "Wage growth leads to increased consumption, which in turn leads to improved corporate performance, and this is thought to be contributing to the overall resilience of Japanese equities." The Nikkei's mixed performance reflected divergent trends within the market. While technology industry suppliers faced significant declines, other sectors showed strength.#broadcom #nikkei_225_index #topix #wataru_akiyama #nomura_securities
