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Nikkei eases ahead of Lower House election

JIJI

The benchmark Nikkei fell back slightly on the Tokyo Stock Exchange on Friday, pressured by profit-taking ahead of the weekend and the closely watched Lower House election Sunday.

The Nikkei 225 closed down 5.17 points, or 0.05 percent, at 9,737.56. But the Topix rose 1.83 points, or 0.23 percent, to end at 801.04, closing above 800 for the first time since April 27.

The Tokyo market opened lower on the heels of overnight declines in European and U.S. stocks. After the initial selling ran its course, some mainstay export-oriented issues recouped their early losses, taking a cue from the yen’s easing. The Nikkei briefly rebounded into positive territory in the afternoon, helped by the yen’s further drop during the midday break and firmness in the Chinese market, brokers said.

The Chinese market surged after the HSBC China manufacturing purchasing managers’ index for December topped the boom-or-bust threshold of 50 for the second straight month.

Still, “some investors were keen to confirm the election’s results, although they have already factored in a change of administration,” said Kenichi Igarashi at Mizuho Investors Securities Co.

Selling to lock in profits was prompted by some technical indicators signaling market overheating after the recent rapid rally, but selling pressure was limited “as the recent stock price movements have met market players’ ideal,” Igarashi said.

Losers outnumbered winners 818 to 711 in the first section. Volume ballooned to 3.267 billion shares from Thursday’s 2.769 billion. Telecommunications carrier Softbank, clothing retailer Fast Retailing and Shin-Etsu Chemical met with selling to lock in profits, helping pull the Nikkei down. Electronics maker Hitachi and precision equipment makers Nikon and Olympus also lost ground, along with retailer Seven & I Holdings and drugmaker Eisai.

By contrast, power utilities such as Tokyo Electric and Kansai Electric posted hefty gains, along with insurer Tokio Marine. In the high-tech sector, Canon, Sony, Sharp and Fanuc ended higher after erasing their early losses, as did automaker Honda

JGB futures fall

Japanese government bond futures lost further ground Friday amid the yen’s weakness.

The lead March contract on 10-year JGBs ended down 0.10 point from Thursday at 144.30. Volume grew to 43,876 contracts from 31,625.