Japan's Nikkei retreats from record peak as market gauges fragile Mideast peace talks

KIOXIA Holdings

02/06/2026 08:43

Updates with closing prices
By Junko Fujita
TOKYO, June 2 (Reuters) - Japan's Nikkei share average retreated on Tuesday from a record high hit in the previous session, as investors cautiously assessed Middle East peace talks, with broader geopolitical uncertainties weighing on risk appetite. 
The index recovered some of its early losses as high-flying memory-chip maker Kioxia 285A.T reversed course to jump nearly 7% ahead of a scheduled investor meeting later in the day.
The Nikkei .N225 ended down 0.3% at 66,734.24, after falling as much as 2% earlier in the session. The broader Topix .TOPX edged down 0.42% to 3,924.24.
The Nikkei touched a record peak of 67,231.28 on Monday and posted a record closing high of 66,934.33, roughly 7% above the 25-day moving average, a sign of an overheated market.  
"There was a caution for the Nikkei's sharp rally, and the optimism for the early end of the Middle East conflict weakened and the oil prices rose," said Daisuke Hashizume, senior strategist at Daiwa Securities. 
Uncertainty looms over the status of ceasefire talks between the U.S. and Iran and the potential reopening of the Strait of Hormuz.
U.S. President Donald Trump said on Monday that talks with Iran were ongoing, while Tasnim news agency reported that Tehran had suspended indirect negotiations with Washington.
In Japan, electronic components maker TDK 6762.T and robot maker Fanuc 6954.T fell 2% each, dragging the Nikkei lower the most. 
Technology investor SoftBank Group 9984.T ended 1% higher after choppy trade. Fibre-optic cable maker Fujikura narrowed its loss to fall 2.2%.
Energy stocks bucked the trend, tracking overnight gains in oil prices, with Inpex 1605.T climbing 4.42%.
Mining .IMING.T jumped 3.75% to become the Tokyo Stock Exchange's top-performing sector.
Bank shares rose, with Mitsubishi UFJ Financial Group 8306.T and Mizuho Financial Group 8411.T gaining 0.76% and 2.24%, respectively. 
Of the nearly 1,500 stocks trading on the TSE's prime section, 28% rose, 69% fell and 2% traded flat. 


 (Reporting by Junko Fujita; Editing by Sherry Jacob-Phillips and Mrigank Dhaniwala)
 ((junko.fujita@thomsonreuters.com;))