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Nikkei drops again ahead of four-day weekend

JIJI

Stocks lost further ground Thursday, pressured by a drop on Wall Street overnight brought on by worries over a slowing U.S. economic recovery and position-adjustment selling ahead of the four-day weekend here.

The Nikkei 225 average closed 105.31 points lower at 13,694.04, extending its losing streak to a fourth session.

The Topix fell 5.09 points to end at 1,153.28.

Stocks got off to a weak start, led by mainstay export-oriented issues, after the Dow Jones industrial average fell for the first time in five sessions, mainly due to weaker than expected U.S. indicators, including a private-sector jobs report for April.

The Nikkei briefly dropped more than 160 points in the afternoon as investors moved to adjust their positions ahead of the four-day weekend, brokers said. The Tokyo market will be closed Friday and Monday for national holidays.

“Some investors wanted to lighten their positions because of wariness over key overseas events during the long weekend,” said Kenichi Hirano, adviser and market analyst at Tachibana Securities Co.

Among such events are the European Central Bank’s policy meeting later Thursday and the release of the U.S. government’s jobs data for April on Friday.

“But purchases by foreign investors continued supporting the market,” Hirano said.

He noted that some technical indicators show that market overheating has been considerably corrected after the recent falls.

The Nikkei had been more than 7 percent above its 25-day moving average earlier in April, but the gap has now narrowed to less than 4 percent, he said.

Losers eclipsed gainers ones 869 to 728 in the first section, while 113 issues were unchanged.

JGBs aided by BOJ buys

Japanese government bonds climbed Thursday on the back of the Bank of Japan’s JGB-buying money market operations.

The lead June futures contract on 10-year JGBs closed up 0.37 point at 145.12. Volume increased to 23,478 contracts from Wednesday’s 21,667.

In late interdealer trading, the yield on the latest 328th 10-year JGB issue with a 0.6 percent coupon stood at 0.560 percent, down from 0.590 percent late Wednesday.

JGB futures opened higher on the heels of overnight gains in U.S. Treasuries.