Nikkei Futures Drop 0.5 Percent Ahead of Tokyo Open

Nikkei futures declined 0.5 percent during early electronic trading, indicating Japanese equities are likely to open lower when the Tokyo session begins. The move aligns with overnight weakness in U.S. and European indexes, which also posted modest losses. Traders cited broad risk-off sentiment tied to lingering questions over global growth and monetary policy.

Futures contracts on the Nikkei 225 are used by investors to gauge sentiment ahead of the cash market open. A 0.5 percent drop in the futures price typically translates into a similar decline once regular trading starts, though the gap can narrow or widen depending on incoming news.

U.S. equity futures also traded lower, while European cash indexes closed down between 0.3 and 0.7 percent. Market participants pointed to mixed corporate earnings and uncertainty around upcoming central-bank decisions as factors weighing on risk assets. No single catalyst dominated the session, and volume remained light as many traders waited for additional economic data later in the week.