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Nikkei dips as investors wait for key events

JIJI

Stocks dropped slightly Thursday as investors took a wait-and-see attitude prior to key economic events and data releases abroad.

The Nikkei 225 closed down 36.63 points at 14,018.93. The Topix fell 3.10 points to end at 1,170.71 and snap a five-session winning streak.

The market came under profit-taking pressure from the outset amid a sense of market overheating stemming from recent advances.

The key indexes briefly rebounded into plus territory, supported by buying on dips, but closed the morning session lower.

In the afternoon, they were stuck in a narrow range as investors retreated to the sidelines ahead of a policy-setting meeting of the European Central Bank and subsequent news conference by ECB President Mario Draghi, as well as the release Friday of U.S. government employment data for June, brokers said.

The ECB is widely expected to keep its monetary policy unchanged. Attention will be paid to Draghi’s news conference as his remarks could cause swings in exchange rates, brokers said.

As for U.S. employment data, Hiroaki Hiwada, senior strategist at Toyo Securities Co., said, “no market impact is expected if growth in nonfarm payrolls is less than 200,000.”

Ahead of the closely watched event and data, “buying concentrated on issues not susceptible to external changes,” Hiwada said.

They include shares of domestic demand-related firms, such as realtors and nonbank lenders, as well as those of medium- and small-capital biotechnology-related stocks, he added.

Falling issues exceeded rising ones 843 to 729 in the first section, while 140 issues were unchanged.

Volume decreased slightly to 2.400 billion shares from Wednesday’s 2.815 billion.

Dentsu plummeted 9.21 percent on dilution concerns after the leading ad agency said Wednesday it will procure up to ¥120 billion by publicly issuing new shares and releasing some own outstanding shares out of its holdings, brokers said.

JGBs rise again

Japanese government bonds gained further ground Thursday, buoyed partly by the day’s solid auction of a new 30-year JGB issue.

The lead September contract on 10-year JGBs closed up 0.13 point from Wednesday at 142.48. Volume edged up to 24,483 contracts from 24,022.