Nikkei Slips 0.4% After Early Gains as Oil and AI Risks Curb Sentiment

Japan’s Nikkei 225 reversed earlier gains and was down about 0.4% during Thursday’s morning session, according to a market snapshot published around 11:15 a.m. Tokyo time (5:15 a.m. Riyadh). The reading is intraday and should not be treated as the session’s closing level.

Early gains fade as risk appetite weakens

Asian equities struggled to hold their early advance even after supportive earnings news from major US technology companies. The pullback suggests investors are still separating strong corporate results from the broader questions surrounding the cost of artificial-intelligence infrastructure, financing conditions and the durability of earnings growth.

Japan was not alone in the cautious turn. Regional markets weakened as US equity futures moved lower, while geopolitical uncertainty and higher energy prices added another layer of risk for import-dependent economies.

Oil, the yen and Bank of Japan policy

Brent crude was trading near $110 a barrel after rising about 1.1%, increasing attention on energy costs. The yen was broadly steady near 158.1 per dollar, while remarks from Bank of Japan officials kept the possibility of further rate increases in focus.

For Japanese equities, the combination matters: a weaker yen can support exporters’ overseas earnings, but persistently expensive energy may pressure costs and domestic purchasing power. Expectations for higher interest rates can also produce uneven performance between banks, exporters and highly valued growth shares.

What are traders watching?

During the afternoon session, investors will be watching whether technology and semiconductor shares can stabilise, whether the yen moves materially away from the 158 level, and whether oil remains above $110. US futures and any new geopolitical headlines may also influence the direction before Tokyo’s close.

MARKET NEWS view: The reversal does not by itself establish a new trend. Confirmation would require a closing reading, broader participation across sectors and greater stability in energy and currency markets.

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