Japan’s Nikkei Snaps Win Streak on Fed Jitters; Uniqlo Owner’s Rally Caps Losses

Reuters

16:20 JST, October 13, 2023

TOKYO (Reuters) — Japanese shares fell on Friday, tracking Wall Street’s declines overnight after hotter-than-expected U.S. inflation data fueled bets for a more hawkish Federal Reserve.

However, losses on Japan’s benchmark Nikkei share average were limited by a 5.75% surge in heavyweight Fast Retailing owner of the Uniqlo brand, following a strong earnings report.

The Nikkei  closed the day down 0.55% at 32,315.99, snapping a three-day winning run.

Fast Retailing was the Nikkei’s only major winner on the day, with the next best performing stock – oil company Inpex – rising just 0.83%.

Of the Nikkei’s 225 components, only 15 were higher, with 208 falling and two flat.

The broader Topix index  slumped 1.44%.

“It’s an environment that’s ripe for profit-taking,” said Nomura Securities strategist Maki Sawada, noting the Nikkei’s 4.8% rally of the past three days and the looming weekend.

Even with Friday’s sizeable selloff, the Nikkei still gained 4.26% for the week, snapping a three-week losing run.

Of the Tokyo Stock Exchange’s 33 industry groups, only mining,  which includes energy companies, escaped losses. Textiles led declines with a 2.33% drop.

Retailing  lost 1.4%, despite Fast Retailing’s rally. Seven & i Holdings – the operator of the 7-Eleven convenience store chain in Japan – was a noteable loser, dropping 4.48% after releasing its own financial results.

Although profit was in line with forecasts, “the lack of a buyback was a slight disappointment,” Jefferies analyst Shunsuke Kuriyama wrote in a research note.

The biggest decliner was Sumitomo Pharma  down 6.33%. Peer Astellas Pharma  lost 3.23%.

Online services companies Rakuten Group and Recruit Holdings fell 4.32% and 3.5%, respectively.

Automakers slid, with Nissan  down 2.71% and Toyota dropping 1.92%.

Nintendo declined 2.43%. Sony Group shed 1.95%.