Japan’s Nikkei share average dropped 1.45% to 42,649.26 on Thursday, retreating from its record high above 43,000 reached the previous day. The pullback ended a six-session rally as investors locked in profits amid concerns of an overheated market and speculation over a potential Bank of Japan interest rate hike.
Market sentiment turned cautious following remarks that the BOJ may be “behind the curve” on monetary policy, sparking expectations of a rate increase. A stronger yen also weighed on exporter shares by reducing the value of overseas earnings when converted back into Japanese currency.
The broader Topix index fell 1.1% to 3,057.95, also breaking a six-day winning streak. Among notable decliners, Advantest dropped 4.64%, Tokyo Electron fell 2.01%, and Mitsubishi Heavy Industries slid 5.69%. Automakers Toyota and Honda lost 2.43% and 1.25%, respectively. SoftBank Group, however, gained 4.4% to stand out among the few gainers.