Japan’s Nikkei Eases on Earnings Drag, Hawkish Fed
15:41 JST, November 10, 2023
TOKYO, Nov 10 (Reuters) – Japan’s Nikkei share average edged lower on Friday, tracking overnight Wall Street losses following a hawkish tilt by U.S. Federal Reserve Chair Jerome Powell, while some heavyweight stocks including SoftBank Group slumped after disappointing earnings.
The Nikkei .N225 ended the day down 0.24% at 32,568.11, but well off lows from the morning session when the index sagged as much as 1.22%.
The broader Topix .TOPX reversed early losses to finish 0.07% higher.
Both benchmarks gained for the week, with the Nikkei up 1.94% and the Topix rising 0.62%.
Overnight, Powell said he and his Fed colleagues “are not confident” that policy is yet restrictive enough to tame inflation, helping to send the 10-year U.S. Treasury yield US10YT=RR soaring as much as 13 basis points to 4.654%.
That led the dollar to surge as high as 151.39 yen JPY=EBS, but without buoying the overall Japanese market.
“There is really nothing of the ‘weaker yen means buy exporters on the boost to earnings’,” said Maki Sawada, a strategist at Nomura Securities.
“Instead it’s the rise in U.S. yields behind the weaker yen that’s making investors nervous.”
That was clear from the underperformance in growth stocks, with a Topix sub-index of the shares .TOPXG retreating 0.25%, while a sub-index of value shares .TOPXV gained 0.38%.
Startup investor SoftBank Group 9984.T slumped 8.17%, making it the Nikkei’s biggest drag.
Nissan 7201.T and Honda 7267.T were other notable decliners, both falling more than 4%.
Financial results created a yawning gap between the biggest winners and losers in the session, with engineering company JGC 1963.T and camera maker Nikon 7731.T each tumbling in excess of 10%, while PC security company Trend Micro 4704.T surged 13.52% and chemical company Resonac 4004.T soared 10.47%.
Japanese earnings season reaches a crescendo on Friday, with about 650 companies reporting, including chip-making equipment giant Tokyo Electron 8035.T, before mostly coming to an end on Tuesday of next week.
"NEWS SERVICES" POPULAR ARTICLE
Japanese Actor-Director Kitano Says His New Film Explores Homosexual Relations in the Samurai World
Japan’s Nikkei Muted; Set to Post First Weekly Drop in Five as Tech Stocks Drag
Japan’s Nikkei Up Sharply as Chip-Related Stocks Rally (Update 1)
Japan’s Nikkei Pares Early Gains as Investors Lock in Profits
Israel Searches for Traces of Hamas in Raid of Key Gaza Hospital Packed with Patients
JN ACCESS RANKING
- Exports of Nishikigoi Carp to China Halted; Permits for Japanese Aquaculture Facilities By China Have Expired
- Japan’s Economy Contracts as Demand Wanes
- AI-generated Child Porn Floods Japan-based Website (Update 1)
- BOJ Member Sought Tweak in Easing
- Bears Sighted in Tokyo Suburbs, Including near Mt. Takao (Update 1)