Insights 
VT 
Key Points:
- Nikkei225 falls 1.0% to 49,574, breaking key 50,000 psychological support
- AI-related names like Yaskawa Electric, Renesas, and Shin-Etsu Chemical lead declines
- Caution dominates ahead of US Non-Farm Payrolls and BoJ policy decision this week
Japan’s Nikkei225 index posted a sharp retreat on Tuesday, closing down 1.0% at 49,574, its weakest level since mid-November.
The selloff came as part of a broader pullback in artificial intelligence–linked equities, with robotics, chipmaking, and automation names leading losses amid rising global growth uncertainty.
Shares of Yaskawa Electric, a key robotics and “physical AI” developer, plunged 6.1%, while Fujikura (data-centre cables) lost 5.6%.
Chipmaker Renesas dropped 3.6%, and silicon wafer producer Shin-Etsu Chemical fell 3.9%, both tracking weakness in global semiconductor sentiment following recent pullbacks in Nvidia and US tech peers.
While SoftBank Group and Advantest pared some losses after Monday’s rout, trader appetite remains fragile across Japan’s AI and tech complex.
Global Macro Pressure Mounts
Traders are increasingly turning defensive ahead of two pivotal macro risk events.
The US Non-Farm Payrolls (NFP) due Tuesday will provide fresh clues on the health of the labour market and guide expectations on the Fed’s rate-cut path.
A weaker-than-expected print could reinforce dovish bets and support equity sentiment, while a surprise upside may revive hawkish risks and weigh on risk assets globally.
The Bank of Japan (BoJ) meets Friday, with growing speculation it may signal a shift away from ultra-loose policy.
While a full exit from negative rates remains unlikely, Governor Ueda’s recent tone has turned incrementally hawkish, and even subtle tweaks to Yield Curve Control (YCC) or guidance language could spark volatility in yen crosses and equities.
Together, these events have led to a “wait-and-see” posture across Japanese markets, with traders locking in gains after a strong year-to-date rally.
Technical Analysis
The Nikkei 225 has pulled back to 49,574, shedding over 500 points (-1.00%) as profit-taking and cautious sentiment weighed in after a strong multi-month rally.
Price action has been consolidating below the 52,669 peak, with short-term moving averages beginning to flatten and show signs of bearish crossover.
The MACD also suggests weakening momentum, with the histogram trending lower and signal lines crossing downward.
While the long-term trend remains broadly intact from the June lows at 36,448, the current price action hints at a potential correction phase.
If support at 49,000 breaks decisively, a deeper retracement toward 47,000 is likely. Bulls need to reclaim the 50,000–50,500 zone to regain upside conviction.
Bottom Line
AI-linked equities are dragging on the Nikkei as markets reassess global rate trajectories and tech valuations. With US jobs data and the BoJ decision both on deck, volatility is likely to remain elevated.
Broader sentiment may hinge on whether macro conditions justify the Fed’s dovish pivot or if inflationary risks force a rethink.
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