Nikkei Retreats from Six-Week High Amid Geopolitical Risks

The Nikkei 225 index in Japan retreated from its six-week high on Friday as investors locked in their gains and turned cautious about interest rates, inflation, and geopolitical risks.

The benchmark index slid 0.79% to 68,413.03, still poised for a 3% gain on the week. The broader Topix index slipped 0.57% to 4,108.53.

Data showed Tokyo's core inflation accelerated in September at its fastest pace in 10 months, bolstering the case for further rate hikes. Geopolitical tensions weighed on markets, with the US-Iran war in the Middle East and disruptions to global energy supplies after China suspended oil product exports beyond Hong Kong and Macau.

According to Yuta Okamoto, an analyst at Tokai Tokyo Intelligence Laboratory, 'concerns about short-term overheating are likely to lead to profit-taking.' However, he noted that the outlook for domestic shares remains positive due to the Bank of Japan's tankan survey showing improved sentiment among large manufacturers.