Tokyo stocks barely extended their gains to a second market day Friday, amid growing concerns over the imminent extension of the coronavirus state of emergency until the end of the month.
The Nikkei average of 225 issues listed on the first section of the Tokyo Stock Exchange inched up 26.45 points, or 0.09%, to end at 29,357.82, after the key market gauge surged 518.74 points Thursday.
The Topix index of all first-section issues ended up 5.65 points, or 0.29%, at 1,933.05, following a 29.16-point jump the previous day.
Stocks got off to a weak start despite rises in all three key U.S. market indicators Thursday, of which the Dow Jones industrial average rewrote its record high for the second straight day. Sell orders piled up in a negative response to the previous day’s sharp rally.
But after those orders were executed, buying took the upper hand thanks to a rise in Dow futures and the solid performance of Chinese and other Asian stocks, brokers said.
In the afternoon, however, the market saw selling pressure build up again as the Japanese government was about to decide to extend and expand the state of emergency, which was to expire on Tuesday, with the Nikkei giving up most of its early gains.
Trading turned lackluster also because players retreated to the sidelines ahead of the U.S. Labor Department’s release of its employment report for April later on Friday, brokers said.
“Firm overseas stocks underpinned the market,” while investors were worried about the adverse impact of the extended state of emergency on the Japanese economy, Kazuo Kamitani, strategist at Nomura Securities Co., said.
Hirohumi Yamamoto, strategist at Toyo Securities Co., noted that foreign investors are increasingly concerned about the possibility of the extension decision destabilizing the administration of Prime Minister Yoshihide Suga.
On the TSE first section, gainers outnumbered decliners 1,611 to 505 while 75 issues were unchanged. Volume dropped to 1.174 billion shares from Thursday’s 1.526 billion shares.
Growth stocks, in particular, attracted buying. Among them were chipmaking gearmaker Tokyo Electron, up 2.38%, and industrial robot-maker Fanuc, up 1.15%.
Nippon Steel grew 2.38% after the leading steelmaker reported a better-than-expected operating profit estimate for the year ending March 2022.
Airlines ANA and JAL also attracted buying.
On the other hand, Nintendo dropped 1.95%, after the game-maker’s operating profit estimate for the year through next March failed to beat a market consensus.
Sony fell for the third straight session.
In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average gained 80 points to end at 29,390.
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