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Nikkei drifts back as yen firms ahead of U.S. data

JIJI

Stocks fell modestly Wednesday, pressured by profit-taking after the yen climbed further against the dollar.

The Nikkei 225 closed down 61.51 points at 13,799.35, extending its losing streak to a third session.

The Topix fell 6.76 points to end at 1,158.37.

Selling gained the upper hand in early trading as the yen strengthened to levels close to 97 to the dollar in Tokyo trading.

But losses in the key indexes were limited, with their downside supported by buying on dips, brokers said.

Although the indexes moved narrowly, some issues came under heavy selling pressure after disappointing earnings reports for the fiscal year that ended in March or earnings guidance for the current year, brokers said.

On the other hand, small-capital stocks attracted buying from individual investors, brokers said.

“Many investors found it difficult to move before the outcome of the U.S. Federal Reserve’s two-day policy meeting is announced and the Institute for Supply Management’s manufacturing index for April is released, both later Wednesday, as well as the European Central Bank’s policy meeting on Thursday,” said Hideyuki Suzuki, general manager and head of the investment market research department at SBI Securities Co.

In addition, investors kept to the sidelines ahead of the four-day weekend starting Friday, Suzuki said. The TSE will be closed Friday and Monday for national holidays.

“Given a dearth of fresh domestic positive incentives, the Tokyo market’s topside may be limited for the rest of the week,” Suzuki said.

Losers exceeded winners 898 to 688 in the first section, while 124 issues were unchanged.

JGBs move higher

Japanese government bonds firmed Wednesday as an auction of new 10-year JGBs went smoothly.

The lead June futures contract on 10-year JGBs closed up 0.22 point at 144.75. Volume increased to 21,667 contracts from Tuesday’s 16,023.

In late interdealer trading, the yield on the latest 328th 10-year JGB issue with a 0.6 percent coupon stood at 0.590 percent, down from 0.600 percent late Tuesday.

JGB futures drew buying interest from the outset of Wednesday’s trading on continued hopes that the ECB will cut its key rate at a board meeting Thursday.