By Junko Fujita
TOKYO, April 23 (Reuters) – Japan’s Nikkei share average reversed course on Thursday after briefly topping the 60,000 level, as investors locked in profits from an early rally driven by technology stocks and an extended Iran-U.S. ceasefire.
The pullback came as investors reassessed lingering geopolitical risks and weakening U.S. stock futures, despite no fresh deterioration in the Middle East outlook.
The Nikkei fell 1.06% to 58,952.11 to end the choppy morning session, after touching a record high of 60,013.98. The early gains were supported by improved sentiment after U.S. President Donald Trump extended the ceasefire with Iran.
The broader Topix fell 1.2% to 3,700.1.
Trump said the indefinite extension of the ceasefire followed a request by Pakistani mediators. However, the U.S. Navy’s blockade of Iranian ports remained in effect, and Iran seized two ships in the Strait of Hormuz.
“There are still uncertainties surrounding the Middle East war. The Strait of Hormuz is not completely open and the oil prices remain high,” said Hiroyuki Ueno, chief strategist at Sumitomo Mitsui Trust Asset Management.
“Investors have bought the shares on optimism for the war’s end until now. But for the index to rise further, they need more positive cues that support the fundamentals that could also lift domestic demand-related stocks.”
The Nikkei has recouped all losses since the start of the U.S.-Iran war in late February, though gains have been driven by a narrow group of artificial intelligence‑related stocks, including SoftBank Group and Advantest.
The so-called NT ratio, the Nikkei 225 divided by the broader Topix, hit a record high of 15.74 on Wednesday, underscoring how the rally has outpaced the wider market.
Investors booked profits after the brief morning rally, as they weighed declines of the S&P and Nasdaq futures in Asia trade, said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management.
In Japan, chip-related shares gave up early gains, with Advantest and Tokyo Electron down 0.16% and 0.53%, respectively.
Technology investor SoftBank Group narrowed its gains, up 3.91%.
Of the 1,600 shares on the Tokyo Stock Exchange’s prime market, 23% rose and 72% fell, and 4% traded flat.
(Reporting by Junko Fujita; Editing by Subhranshu Sahu and Sherry Jacob-Phillips)
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