Japanese Stocks Decline for Second Session Amid AI Stock Pressure and Monetary Policy Watch

Japanese stocks continued to decline for the second straight session, with increased selling pressure on technology and AI shares. Investors are closely monitoring developments in monetary policy in both the U.S. and Japan. The Nikkei 225 index fell by about 1% to below 49,700 points, while the broader Topix index declined by 0.9%, nearing 3,400 points, according to trading data. This weak performance was influenced by a wave of selling led by AI stocks on Wall Street, along with cautious sentiment ahead of the upcoming U.S. jobs report, which could significantly affect market expectations regarding the Federal Reserve's monetary policy. Locally, Japanese markets showed a wait-and-see attitude ahead of the Bank of Japan meeting, with widespread expectations of a rate hike later in the week, supported by a series of robust economic data, increasing caution among traders. Technology and AI stocks led the declines, with SoftBank down by 1.1%, Kioxia Holdings falling over 3%, and Fujikura experiencing sharp losses, alongside declines in major semiconductor companies. Selling pressure also extended to other key sectors, including financial, consumer, and industrial sectors, with shares of Mitsubishi UFJ, Sony Group, and Mitsubishi Heavy Industries declining, further exacerbating market losses during the session. These movements reflect ongoing uncertainty in global markets, with increased investor sensitivity to macroeconomic data and central bank trends, particularly amid the volatility seen in technology and AI stocks.