FX168 Financial News Agency (Asia Pacific) - On Thursday, October 17th, the Japanese stock market closed lower. Despite Taiwan Semiconductor (TSMC), a star company in the chip industry, reporting better-than-expected earnings, chip stocks continued to decline. Investors are waiting for more financial results from domestic and international companies to find further direction.

At the close, the Nikkei 225 average index of 225 stocks fell by 269.11 points, a decrease of 0.69%, closing at a one-week low of 38,911.19 points. The broader Topix index fell by 2.83 points, or 0.11%, to 2,687.83 points. #JapaneseMarket#

On the first-tier main board market, precision instruments, nonferrous metals, and chemical stocks led the decline.

During afternoon trading, the selling pressure increased. Out of the 225 constituent stocks of the Nikkei index, 127 closed lower, including heavyweight stock Fast Retailing, which fell by 1.1%.

Major technology stocks fell for the second consecutive trading day, dragging down the Nikkei index. Previously, ASML Holding lowered its full-year sales forecast, sparking concerns about demand and causing chip-related stocks to plummet in the previous trading day.

Despite Taiwan Semiconductor announcing a 54% increase in third-quarter profit, exceeding expectations, the decline in technology stocks temporarily narrowed. However, as the main producer of advanced chips used in artificial intelligence applications, Taiwan Semiconductor was unable to reverse the overall trend.

Stock price of chip testing equipment manufacturer Advantest slightly recovered but still fell by 0.6%. Moreover, chip manufacturing equipment giant Tokyo Electron Ltd. Unsponsored ADR dropped by 3.2%, becoming the biggest drag on the Nikkei index. Semiconductor manufacturer Shin-Etsu Chemical slipped by 1.4%. Chip manufacturing equipment supplier Disco fell by 1.5% before releasing financial results.

"The market is in a cautious mood," said Kazuo Kamitani, strategist at Nomura Securities' Investment Content Division, as Dutch chip equipment manufacturer ASML Holding earlier this week lowered its earnings forecast for 2025. He stated, "Semiconductors and electronic components used in artificial intelligence and new smart phone technology are performing well, but products outside of these areas seem to be underperforming, causing concerns among investors."

Nomura Securities strategist Maki Sawada stated that starting from next week, manufacturers will successively release financial reports, which investors are also closely watching.

"Today's market trend feels mainly like a position adjustment in response to the upcoming financial reports," the strategist said.

Traders indicated that due to strong US economic data, the market expects a smaller cut in US interest rates, leading the US dollar to remain strong in the Tokyo market, stabilizing against the yen in the middle of the 149 range.

As the yen struggles around the 150 level against the dollar, automotive stocks closed higher, which is bullish for exporters, but the increase narrowed compared to the morning.

Subaru Corporation rose by about 2.3%, Nissan Motor rose by 1.3%, and Toyota Motor rose by 1%.

When overseas income is repatriated, exporters typically benefit from the devaluation of the domestic currency.

Financial stocks performed strongly after closing higher on Wall Street with the help of their US counterparts, Mizuho Financial Group rose by 2.2%, and Mitsubishi UFJ Financial Group rose by 1.9%.