The Nikkei 225 average ended slightly lower Thursday after moving without direction due to a lack of fresh incentives and lingering U.S. fiscal uncertainties.
The key market index closed down 13.24 points at 14,157.25, the lowest closing level since Sept. 6. The Topix fell 1.17 points to end at 1,173.99, extending its losing streak to a fifth session.
The market lost ground in early trading on the heels of a fall on Wall Street overnight and a rise in the yen against the dollar, with the Nikkei briefly falling more than 80 points.
Stocks showed resilience later thanks partly to a drop in the yen and buybacks after sharp losses Wednesday.
The Nikkei briefly rebounded into positive territory, but its topside was limited with no prospects in sight for an end to the U.S. government shutdown.
Wednesday’s talks between President Barrack Obama and congressional leaders made no progress toward reopening the government.
A prolonged conflict between Democrats and Republicans over fiscal problems could hamper the U.S. economic recovery. But TSE watchers believe that U.S. lawmakers will prevent a government default by eventually hammering out a compromise on the debt ceiling before the Oct. 17 deadline.
“While the market’s upside continued to be capped by the U.S. fiscal concerns, investors found it difficult to sell aggressively because such a political standoff could be resolved in a blink of an eye,” said Kenichi Hirano, adviser and market analyst at Tachibana Securities Co.
“The Tokyo market is expected to move in a relatively narrow range for some time while alternating between hope and despair about the course of the U.S. fiscal deadlock,” Hirano added.
Losers outnumbered winners 1,106 to 526 in the first section, while 120 issues were unchanged. Volume fell to 2.423 billion shares from Wednesday’s 2.901 billion.
Oil-related Inpex, JX Holdings and Idemitsu Kosan were downbeat, along with tire-makers Sumitomo Rubber and Yokohama Rubber.
JGB futures rise again
Japanese government bond futures gained further ground Thursday, underpinned by steady demand for cash bonds.
The lead December futures contract on 10-year JGBs added 0.14 point to close at 144.49. Volume increased to 30,095 contracts from 26,220 the previous day.