The benchmark Nikkei average turned higher on Monday thanks to a rise on Wall Street late last week, but its top side was capped due in part to the yen’s advance.
The 225-issue Nikkei average of the Tokyo Stock Exchange gained 77.72 points, or 0.27%, to close at 29,019.24, in a turnaround from a drop of 116.59 points Friday.
The Topix index of all first section issues finished 1.66 points, or 0.08%, higher at 1,960.85, extending its winning streak to a fifth market day. It gained 0.49 point on Friday.
The market opened broadly higher, after all three key U.S. stock gauges rose Friday following the Labor Department’s announcement of weaker-than-expected growth in U.S. nonfarm payrolls in May, which reduced expectations for the U.S. Federal Reserve’s early tapering of its quantitative easing.
However, the Tokyo market lost steam soon.
The Nikkei rose about 300 points right after the opening. The index later saw its topside capped by selling, especially of export-oriented issues, amid the yen’s strengthening against the dollar although it managed to finish with a gain.
A fall in U.S. index futures in off-hours trading also dampened investor sentiment.
“A wait-and-see mood is growing among market players” ahead of the release on Thursday of the U.S. consumer price index for May and the Fed’s Federal Open Market Committee meeting next week, said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co.
The market failed to record strong gains due to “persistent worries over inflation (in the United States) and the Fed’s possible tapering,” Kazuo Kamitani, strategist at Nomura Securities Co., said, adding that investors will be reluctant to chase higher ground for the time being as they are waiting to see the result of the FOMC meeting.
On the domestic front, Kamitani said investor appetite would shift to railway operators, staffing agencies and other companies that are likely to attract post-coronavirus demand. Currently, 10 prefectures are under a state of emergency over the novel coronavirus, and some others are in a pre-emergency stage over the epidemic.
On the TSE first section, gainers slightly outnumbered decliners, 1,052 to 1,036, while 105 issues were unchanged. Volume dropped to 945 million shares from Friday’s 1.056 billion shares.
Shibaura Mechatronics soared 8.44% to top ¥8,000 for the first time in 14 years, with investors welcoming the news that the company is set to participate in a cutting-edge semiconductor research and development project of Taiwan’s TSMC, the world’s leading chip foundry.
Golf Digest Online rose 3.86% after Filipino Japanese professional golfer Yuka Saso won the U.S. Women’s Open on Sunday.
Medical information provider M3 was up 2.35% following a media report that it will start introducing doctors to companies to help them carry out workplace vaccinations against the novel coronavirus.
Olympus rose 5.16% on its announcement Friday that the optical equipment-maker has started considering spinning off its scientific solutions business.
Technology issues, including semiconductor-related TDK and Taiyo Yuden, also attracted buying.
Meanwhile, exporters met with selling. Among them, Toyota lost ground for the first time in five sessions. So did peers Honda and Suzuki.
Other losers included clothing retailer Fast Retailing, a heavyweight component of the Nikkei average, cosmetics maker Shiseido and construction machinery-maker Komatsu.
In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average advanced 90 points to 29,020.
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