Japanese stocks ended the week's trading with a slight decline, Friday, after doubts about the artificial intelligence sector's profit prospects sparked a wave of profit-taking, at a time when a decline in Japanese and US government bond yields helped allay fears of rising global borrowing costs.
The Nikkei 225 index closed 0.02 percent lower at 69,030.92 points, after trimming early losses of 1.3 percent. Thus, the index recorded a weekly loss of 0.39 percent, despite exceeding the level of 70 thousand points at the beginning of the week.
On the other hand, the broader Topix index rose by 0.33 percent to 4,104.81 points, benefiting from the gains of some technology and services companies, amid a clear discrepancy in the performance of leading stocks.
The pressure on the Japanese market came as an extension of the decline in US stock indices during Thursday's session, after a report published by the Financial Times raised questions about the revenues of OpenAI, one of the most prominent unlisted companies in the artificial intelligence sector.
The report stated that the annual revenues calculated based on the company's current rate are about $20 billion less than previously indicated, which prompted investors to re-evaluate their expectations for the growth of companies related to the sector.
The stock of SoftBank Group, one of the major investors in OpenAI, fell by about 4 percent, constituting one of the most prominent sources of pressure on the Nikkei index.
Analysts at Sony Financial Group said that reports indicated a decline in the revenues of a major unlisted company in the field of artificial intelligence below its previous expectations led to a successive wave of selling in stocks related to the sector.
They added that the continued rise in global interest rates, driven in part by concerns about French financial conditions, also limits the ability of stocks to achieve additional gains.
Take profits after a rising wave
Japanese stocks witnessed a strong start to the week, as the Nikkei crossed the 70,000 level and closed Tuesday at its highest level since June 25, before losing momentum as investors returned to taking profits.
Ena Harimoto, a market analyst at Tokai Tokyo Intelligence Laboratory, said that Japanese stocks recorded a sharp rise at the beginning of the week, but were later exposed to selling pressure as a result of profit-taking operations.
Despite concerns about the valuations of artificial intelligence companies, some technology stocks received support from positive business expectations.
The shares of “Rorzi”, which specializes in semiconductor manufacturing equipment, jumped by 15.79 percent, which is the maximum percentage allowed during the session, after the company announced that it raised its profit expectations in response to the increasing demand for its products.
“Shift” stock topped the list of gainers in the “Nikkei” with an increase of 6.48 percent, followed by “Nomura Research Institute” by 5.09 percent, then “Trend Micro” by 4.91 percent, with the latter recording the highest closing since December 2025.
In contrast, “Fast Retailing” shares fell by 4.04 percent, “Renesas Electronics” by 4 percent, and “Asahi Kasei” shares fell by 3.94 percent.
The range of winning stocks expanded during the session, with 148 stocks rising within the Nikkei index, compared to a decline of 74 stocks and the stability of three, which reflects a relative improvement in investor appetite despite the decline in the main index.
Bonds regain their balance
In the debt market, Japanese government bond yields fell for the second session in a row, tracking the decline in US Treasury yields after a strong auction of US 30-year bonds. The yield on Japanese benchmark 10-year bonds fell by 4.5 basis points to 3.035 percent, recording the lowest close since September 18. The 30-year bond yield also fell by 5.5 basis points to 4.065 percent, the lowest level since the same date, after it had reached a record level earlier in the week.
The two-year bond yield, which is most sensitive to the Bank of Japan's monetary policy outlook, fell by 1.5 basis points to 1.915 percent, while the five-year yield fell by three basis points to 2.355 percent.
This improvement came after the success of the 30-year Japanese bond auction, on Thursday, in attracting strong demand, which helped restore a measure of confidence in the market after a sharp rise in yields.
Noriatsu Tange, chief bond strategist at Mizuho Securities, said that the temporary halt of the rise in US long-term interest rates, in addition to the passage of the Japanese bond auction without problems, means that the market is not currently facing major pressure.
Interest and oil determine the trend
Investors' expectations about the speed of monetary tightening in Japan have declined, with the Bank of Japan likely to raise interest rates in December rather than October. The central bank raised the key interest rate to 1.25 percent during September, indicating a cautious approach regarding any additional increases.
At the same time, concerns related to rising oil prices and global borrowing costs remained present, especially with continued pressure on European debt markets and rising corporate and government issuances.
Rising energy prices increase the likelihood of continued inflationary pressures, which may prompt central banks to maintain tight monetary policies for a longer period.
The week's outcome reflects a fragile balance in Japanese markets. AI sector growth expectations still support some companies, but high valuations make stocks more sensitive to any signs of slowing revenues.
On the other hand, the decline in bond yields provides a breathing space for investors after the recent wave of volatility, while the path of US and Japanese interest rates, along with oil prices and the results of technology companies, remains the most prominent factor in determining the market’s direction in the coming weeks.
Copper prices rose in London on Friday, recovering most of the losses of the previous session, supported by the disruption of operations in mines and strong demand in China, the largest consumer of the metal in the world.
Standard three-month copper contracts on the London Metal Exchange rose 1.08 percent to $14,464 per metric ton by 03:00 GMT, after falling by 1.15 percent in the previous session. The metal has risen by 1.44 percent since the beginning of the week.
On the other hand, the most traded copper contract on the Shanghai Futures Exchange fell by 0.61 percent to 110,060 yuan ($16,431.03) per ton, affected by the losses recorded by the market in London during the previous session.
“Copper prices are approaching record levels, supported by issues on the supply side,” Daniel Haynes, chief commodities strategist at ANZ Bank, said in a note.
The Yangshan copper premium, an indicator of Chinese demand for imported copper, rose to $125 per ton on Thursday, recording its highest level since November 2022, coinciding with China resuming its activities after a week-long holiday.
In Chile, a labor union at Antofagasta's Centinela copper mine said that the ongoing strike would begin to negatively impact production during November, with the possibility of it being reduced by half. The company had previously downplayed the impact of the strike.
Disturbances at other mines also added to the risks of supplies, which were already under pressure, while inventories outside the United States declined, as copper flowed into the country, in anticipation of the possibility of tariffs on imports of refined copper.
The dollar index, which measures the performance of the US currency against a basket of major currencies, recorded a slight decline, and oil prices also fell slightly on Friday.
The rise in the dollar and oil prices had pressured the prices of industrial metals earlier; The rise of the US currency increases the cost of basic goods for buyers using other currencies, while high energy prices threaten to exacerbate concerns about inflation and pressure on economic activity.
On the London Metal Exchange, aluminum prices rose by 1.08 percent, zinc by 0.97 percent, lead by 0.75 percent, nickel by 0.72 percent, and tin by 1.56 percent.
On the Shanghai Futures Exchange, aluminum prices fell by 0.34 percent, zinc by 1.09 percent, lead by 1.3 percent, nickel by 0.08 percent, and tin by 4.03 percent.
