AI stocks fell this week, while non-AI stocks remained firm. Domestic-demand and defensive stocks in particular supported the market, with attention focused on the performance of names including Toyota Motor.
Last week, a sharp decline in AI-related stocks affected the broader market, and the Nikkei 225 fell substantially. Non-AI stocks were firm, however, with buying spreading particularly across domestic-demand defensive stocks. As AI stocks declined, the market environment prompted a rotation into domestic-demand and defensive stocks.
Among individual stocks, Toyota Motor, whose market capitalisation is expanding, remained firm with a 6.3% gain, while pharmaceutical stocks including Astellas Pharma rose. Even as AI stocks declined, domestic-demand stocks often helped support the market.
Sharp gains in small-cap stocks with company-specific catalysts were also notable. Cluster Technology announced a capital and business alliance with Seiko Epson and rose 188.1% in one week, sending its share price up more than 2.8-fold on an adjusted basis. Internet security stocks Showcase and Secure Veil also continued to surge, with price movements in related stocks becoming more active.
From next week onward, the overall market trend could be driven by the direction of AI stocks, while domestic-demand and defensive stocks are expected to support the market's underlying firmness. Attention also focused on movements in security-related stocks as the market responded to US corporate earnings and foreign-exchange and interest-rate trends.