Nikkei Slight Dip from Peak as Fed Rate Cut Looms

Japan’s Nikkei index slipped modestly after reaching a recent high, as global investors awaited a critical rate decision from the U.S. Federal Reserve. The tech-oriented index ended the day down about 0.3%, retreating from its prior record close. At the same time, the broader Topix index dropped roughly 0.7%, also pulling back after setting a record high just one day earlier.
Semiconductor stocks played a key role in the market’s movements: Tokyo Electron led the gains in the Nikkei, jumping over 5%, while peers such as Disco registered solid advances. Even with a stronger yen putting pressure on export revenues, export-heavy names like Sony and Toyota crept higher, reflecting selective strength amid the broader pullback.
Globally, markets have been surging on expectations of near-term U.S. rate cuts. The consensus among traders is that there could be at least two quarter-point cuts by the end of the year, with additional easing potentially extending into early 2026. However, investors remain cautious: many stocks declined even as the index flirted with its highs, showing a breadth that favors profit-taking in some areas.
Overall, the mood in Tokyo mirrored global markets — a mix of optimism for policy easing, tempered by concern over valuation and currency headwinds. For exporters wrestling with yen strength, the upcoming Fed guidance could prove especially consequential.