Business / Financial Markets | TSE DATA & REPORT

Nikkei falls for fourth consecutive session on Rakuten plan and Wall Street drop

JIJI

The benchmark Nikkei average extended its losing streak to a fourth session Friday, weighed down by an overnight fall in U.S. equities.

The 225-issue Nikkei average fell 141.23 points, or 0.62 percent, to end at 22,553.22 on the Tokyo Stock Exchange. On Thursday, the key market gauge lost 63.62 points.

The Topix index of all first-section issues lost 14.67 points, or 0.81 percent, to close at 1,793.47, after shedding 2.70 points the previous day.

Tokyo stocks opened weaker following Thursday’s retreat on Wall Street, where the Dow Jones industrial average snapped a four-session record-breaking advance after being battered by concerns over whether the U.S. tax reform bill will see early passage.

The Tokyo market was also hit by heavy selling in Japan’s three major mobile phone carriers after cybermall operator Rakuten announced the previous day that it plans to become the fourth player in the market with its own communications infrastructure. The Nikkei briefly slumped over 210 points in the morning.

In the afternoon, the key market gauge cut the losses and rebounded into positive territory on buybacks and purchases on dips, brokers said. Toward the close, however, stocks met with position-adjustment selling ahead of the weekend, brokers said.

Mobile phone issues were sold as investors assumed that Rakuten’s entry “would intensify competition,” said Chihiro Ota, general manager for investment research and investor services at SMBC Nikko Securities Inc.

The drops in SoftBank Group and KDDI, both heavyweight components of the Nikkei average, pushed down the market overall, Ota said, noting that futures-led purchases in the afternoon helped drive the temporary rebound.

Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management Co., said the buybacks were inspired by the Nikkei’s fall below 22,500 in the morning.

“Nonresidents who have recently been net sellers of (Japanese) stocks might have bought mainstay issues in the afternoon session,” Ichikawa also said.

But the market failed to maintain upward momentum as players moved to cash in ahead of the weekend, he added.

Falling issues overwhelmed rising ones 1,343 to 629 in the TSE’s first section, while 81 issues were unchanged.

Trading volume grew to 1.844 billion shares from Thursday’s 1.666 billion shares.

SoftBank Group and KDDI lost 2.39 percent and 6.65 percent, respectively. Rakuten fell 5.49 percent due to investor concerns over the profitability of its mobile phone foray, brokers said.

Mega-bank groups Sumitomo Mitsui, Mitsubishi UFJ and Mizuho lost further ground on receding expectations for early U.S. tax reform, brokers said.

By contrast, industrial materials maker Showa Denko and casual clothing chain operator Fast Retailing attracted purchases.