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Market Chatter: Japan IPO Market Will Stay Subdued as AI Stocks Draw Investors

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-- Japan's IPO market will remain under pressure despite strong debuts from a sake brewer and a pet food maker, as investors continue to favor AI-related stocks, Reuters reported Tuesday.

Shares of Umenoyado Brewery (TYO:559A) rose about 75% on their first trading day, while Inuneko-Seikatsu (TYO:556A) gained more than 30% after listing. The gains contrast with broader weakness, with many new listings trading below their offer prices this year, the report said.

Investor focus on AI leaders such as SoftBank Group (TYO:9984) and Advantest (TYO:6857) has diverted flows away from smaller, domestically focused IPO candidates. Stricter listing standards from the Tokyo Stock Exchange are also weighing on activity, with companies facing tougher valuation thresholds in coming years, according to the report.

The number of IPOs in Tokyo will likely fall about 20% this year from 2025 levels, as retail investors prioritize short-term gains in large-cap technology stocks over new listings, the report said.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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