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TOKYO (Reuters) – Japan’s Nikkei share average fell on Monday as technology shares tracked U.S peers’ losses at the end of last week, while drugmaker shares declined after a noted vaccine skeptic was appointed to head the U.S. Department of Health.
Automaker shares came under pressure from an overall stronger yen, although the currency pulled back slightly from early highs after Bank of Japan Governor Kazuo Ueda refrained from giving strong hints about the timing of interest rate hikes in a speech to business leaders. Ueda will also hold a news conference at 0445 GMT.
The Nikkei entered the midday recess down 0.78% at 38,343.39.
It had earlier tumbled as much as 1.27%, but got some respite after the yen dropped back to the weaker side of 155 per dollar from as strong as 153.84 earlier in the session. It was changing hands at 154.60 as of 0233 GMT.
A strong yen reduces the value of overseas revenue for Japan’s heavyweight exporters, and also makes Japanese stocks more expensive for foreign investors.
The broader Topix lost 0.47%.
On Friday, all three of the main Wall Street indexes declined, and the Philadelphia SE Semiconductor Index slumped 3.4%.
The initial euphoria over a Donald Trump election win ushering in easier regulation and bigger fiscal spending shifted last week to worries over the potential for higher inflation under his policies that could slow Federal Reserve rate cuts.
His cabinet picks have also caused some concerns, including the appointment of Robert F Kennedy Jr, who has spread misinformation on vaccines, to head the Department of Health and Human Services.
Chugai Pharmaceutical was the Nikkei’s biggest loser, sliding 8.56%. Drugmakers as a group led decliners among the Tokyo Stock Exchange’s 33 industry groups.
“Whether the Trump trade is over or just on pause is not possible to discern at the moment,” said Kazuo Kamitani, an equities strategist at Nomura Securities.
“My personal feeling is that the market will be turbulent all of this month.”
Among tech names, Tokyo Electron dropped 2.26% and startup investor SoftBank Group fell 2.31%.
Nvidia supplier Advantest was volatile, dropping as much as 3.58% before bouncing as much as 1.38% and then entering the midday recess close to flat. Nvidia’s earnings report on Wednesday will be one of the most closely watched market events of the week.
