TOKYO: Japan鈥檚 Nikkei share average inched lower on Wednesday, weighed down by declines in US stock futures, as investors awaited clarity on whether a fragile ceasefire between Israel and Iran would hold.
The Nikkei was down 0.1% at 38,750.47 by the midday break, after flitting between modest gains and losses. The broader Topix fell 0.34% to 2,771.93.
鈥淭he market had already factored in the gains of US stocks last night subsequent to a ceasefire announcement,鈥 said Naoki Fujiwara, senior fund manager at Shinkin Asset Management.
The Nikkei snapped a three-day losing streak to end higher on Tuesday after US President Donald Trump announced the ceasefire agreement late Monday.
The truce appeared fragile: Both Israel and Iran took hours to acknowledge they had accepted the ceasefire and accused each other of violating it.
Still, investors viewed the ceasefire rhetoric as a sign of de-escalating tensions, pushing the US stocks up more than 1% overnight.
But S&P and Nasdaq futures slipped during Asian hours, which the market interpreted as a sign of potential declines on Wall Street later in the day, said Kentaro Hayashi, senior strategist at Daiwa Securities.
鈥淚nvestor sentiment was also weighed by the stability of Japanese politics ahead of the upper house election (next month), and the development of ongoing trade talks.
If the US Federal Reserve cuts interest rates, that could lift the yen higher,鈥 he added. Technology investor SoftBank Group fell 3.18% to drag the Nikkei the most. Medical equipment maker Olympus tanked 10.99%.
Shares of Toyota Motor lost 1.41%.
Chip-related stocks advanced, tracking a 3.8% gain in the US Philadelphia Semiconductor Index.
Tokyo Electron climbed 2.34% and Advantest added 1.31%. Of more than 1,600 stocks trading on the Tokyo Stock Exchange鈥檚 prime market, 27% rose and 68% dropped, while 4% traded flat.