The Nikkei 225 Index was flat at 47,965.29, as of midday break, while the broader Topix was up 0.7%.
The Nikkei eked out a gain on Tuesday to mark a new closing high of 47,950.88, riding optimism from the weekend election of Sanae Takaichi to lead the ruling Liberal Democratic Party.
Takaichi, now poised to become Japan’s next prime minister, has advocated for looser fiscal and monetary policy, as well as targeted investment in sectors including artificial intelligence, semiconductors, and defence.
“If we look at some of the companies that have been going up, it looks like it’s more expectations than fundamentals,” said Kei Okamura, managing director at asset manager Neuberger Berman in Tokyo. “It’s a little frothy, for sure.”
Exporter shares were also buoyed by a sharp slide in the yen, trading at the weakest point since February. Within the Nikkei index, 148 stocks advanced while 76 declined. The 14-day Relative Strength Index (RSI) started the session at 77, remaining above the 70 threshold that signals an overheated market. The largest percentage gainers in the index were heavy machinery maker IHI Corp, up 6.3%, followed by Fujikura , a key supplier in the AI sector that jumped 4.2%.
The biggest drag in the Nikkei, in terms of index points, were SoftBank Group, which slid 2.1%, and chip-sector heavyweight Tokyo Electron, down 2.2%.
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