Stocks turned lower on the Tokyo Stock Exchange Thursday, hurt by an overnight drop in U.S. equities and the yen’s strengthening against the dollar.
The 225-issue Nikkei average dropped 42.86 points, or 0.20 percent, to end at 21,803.62. On Wednesday, the key market gauge had risen 35.96 points.
The Topix index of all first-section issues closed down 2.29 points, or 0.14 percent, at 1,638.97, after gaining 2.81 points the previous day.
Selling outpaced buying from the outset of Thursday’s trading, with financial issues leading the way down, as investor sentiment was dampened by Wall Street’s slump the previous day and a stronger yen against the dollar, brokers said. The Nikkei briefly lost over 200 points in early trading.
After the initial selling ran its course the Nikkei and Topix resisted falling further, supported by buying on dips and bargain hunting, brokers said.
Weak U.S. stock prices sapped investors’ buying appetite, said Ryuta Otsuka, strategist at the investment information department of Toyo Securities Co. The Dow Jones Industrial Average lost over 1,100 points in the four sessions through Wednesday.
Explaining the Tokyo market’s sluggishness, Otsuka also pointed to major Japanese companies’ “not so impressive” earnings forecasts for the year to March 2019.
An official at a Japanese asset management firm said, “Investors are unlikely to chase higher ground without positive trading factors regarding U.S.-China trade friction.”
Rising issues outnumbered falling ones 1,111 to 911 in the TSE’s first section, while 89 issues were unchanged.
Volume increased to 1.500 billion shares from 1.432 billion shares Wednesday.
Financial issues met with selling after their U.S. peers fared poorly overnight. They included megabank groups Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc., insurer Tokio Marine Holdings Inc. and brokerage giant Nomura Holdings Inc.
Skylark Holdings Co. dropped 1.49 percent after the restaurant chain revised down its consolidated earnings projection for the year to December 2018 on Wednesday.
Other major losers included mobile phone carrier SoftBank Group Corp. and drugmaker Takeda Pharmaceutical Co.
By contrast, Japan Post Holdings Co. rose 0.73 percent a day after announcing an upward revision in its consolidated earnings forecast for the year to March 2019.
Also higher were cosmetics maker Shiseido Co. and power firm Tokyo Electric Power Company Holding Inc.
In index futures trading on the Osaka Exchange, the key December contract on the Nikkei average ended unchanged at 21,820.