Stocks fell back in slow trading on the Tokyo Stock Exchange Thursday, as investors retreated to the sidelines to see developments associated with tariff negotiations between the United States and Mexico.
The 225-issue Nikkei average edged down 2.06 points, or 0.01 percent, to end at 20,774.04, after jumping 367.56 points on Wednesday.
The TOPIX index of all first-section issues finished down 5.17 points, or 0.34 percent, at 1,524.91. It gained 30.99 points the previous day.
Despite an overnight rise in U.S. equities, the Tokyo market got off to a weak start after U.S. President Donald Trump tweeted that “progress is being made” in the tariff talks but “not nearly enough.”
The Nikkei soon took an upturn and remained in positive territory until late afternoon trading thanks to buying in such heavily weighted component issues as clothing store chain Fast Retailing and technology investor SoftBank Group, brokers said.
Meanwhile, the TOPIX fluctuated narrowly around the previous day’s closing level for the most of the session.
The yen’s continued strength against the dollar also prevented active stock buying, brokers said.
Expectations for a U.S. interest rate cut, as well as some rosy views on the U.S.-Mexico negotiations, helped Wall Street extend gains. But unlike the previous day, the Tokyo market was sluggish.
“Investors have grown concerned about U.S. monetary easing’s effects of pushing up the yen via-a-vis the dollar,” said Yoshihiko Tabei, chief analyst at Naito Securities Co.
Masayuki Otani, chief market analyst at Securities Japan Inc., said players refrained from active trading ahead of the U.S. government’s release of jobs data for May on Friday.
“They were bracing for a dismal figure, after Automatic Data Processing Inc.’s U.S. employment report showed far weaker-than-expected growth in nonfarm payrolls in the month,” he noted.
Falling issues outnumbered rising ones 1,400 to 649 in the TSE’s first section, while 92 issues were unchanged.
Volume shrank to 1.068 billion shares from Wednesday’s 1.280 billion shares.
Oil firms met with selling due to a fall in crude oil prices. They included Idemitsu, JXTG and Cosmo Energy.
Automakers Nissan and Mitsubishi were lower after Fiat Chrysler Automobiles NV withdrew its merger offer to the Japanese firms’ French alliance partner Renault SA.
Among other losers were chip making gear manufacturer Tokyo Electron and job information service firm Recruit Holdings.
On the other hand, domestic demand-oriented issues drew buying, with drug maker Daiichi Sankyo rising 1.72 percent, daily goods maker Kao 1.25 percent and railway operator JR East 1.06 percent.
Cybermall operator Rakuten and airline JAL also rose.
In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average gained 10 points to end at 20,740.