Tokyo shares ended sharply lower on Friday, driven by severe profit-taking across the tech and communication sectors. Nikkei 225 futures (JP225) are currently down 1.7%, dropping below 10-day exponential moving average amid stalling AI-optimism.
After peaking near historical highs, JP225 futures have pulled back sharply, breaking below the short-term yellow EMA line. The index is currently testing a key historical resistance-turned-support level around 69,800. While the broader daily uptrend remains intact—supported by the rising long-term purple EMA line—the near-term momentum has shifted bearish. A failure to hold the 69,800 zone could open the door for an extended correction toward the 67,200 area. Source: xStation5
What’s driving JP225 today?
-
Regional sentiment shifts to risk-off amid structural headwinds: Sentiment across Asia has sharply soured as institutional investors pull capital from export-reliant hubs, triggered by growing fears of an unsustainable technology valuation gap between heavy AI infrastructure spending and lagging short-term revenues.
-
Tokyo inflation spike pulls forward hawkish BoJ rate-hike bets: June headline Tokyo CPI rose faster than expected to 1.7% y/y, while the underlying core-core gauge (excluding fresh food and energy) accelerated to 1.9%, signaling building price pressures and rising second-round effects from oil. Coupled with increasingly hawkish rhetoric from Governor Ueda, forecasts for the next Bank of Japan interest rate hike moved from December to October.
-
Equities lose their appeal amid growing yields: As rising yields squeeze equity valuations, global stocks are rapidly losing their appeal amid a highly volatile macroeconomic outlook. This pressure is amplified by growing exhaustion and structural skepticism surrounding the near-term profitability of the artificial intelligence sector.
-
Heavy technology sell-off: Market heavyweight SoftBank Group plunged 12.53% as OpenAI might be postpoining its IPO, while prominent chip-sector players Kioxia Holdings and Taiyo Yuden slid 11.24% and 10.84%, respectively, mirroring broader regional weakness in AI-related hardware stocks.
-
Market breadth holds positive despite sharp index plunge: Although the Nikkei benchmark suffered steep losses, advancing stocks actually outnumbered declining ones by 1,785 to 1,730 on the Tokyo Stock Exchange. Defensive names like Kao Corp surged 4.85%, alongside gains in Haseko and Olympus, while the Nikkei Volatility index cooled significantly, dropping 22.47% to 30.77.
Chinese stocks in panic mode 🚩 Alibaba down 50% from all-time high
Economic Calendar: US consumer sentiment and Fed speeches in the focus (26.06.2026)
Morning Wrap: Asia extends Wall Street selloff on expensive hardware (26.06.2026)
Daily summary: Semiconductors are swallowing Wall Street
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
