• Reuters

Japan’s Nikkei Snaps Six-Day Winning Streak (Update 1)

Yomiuri Shimbun file photo
Tokyo Stock Exchange

TOKYO, Jan 16 (Reuters) – Japan’s Nikkei share average slipped on Tuesday, snapping a six-day winning streak that pushed the index to 34-year highs.

The Nikkei fell 0.79% at 35,619.18, with only 47 stocks rising against 178 decliners.

The broader Topix declined 0.82% to 2,503.98.

The Nikkei briefly surged to 36,008.23 the previous day, a level not seen since February 1990, but failed to hold onto it, closing at 35,901.73.

The market was hitting irrational levels, said Kyle Rodda, senior financial market analyst at Capital.com.

“With technicals this overbought, we are due for a correction.”

The Nikkei volatility index eased to 21.2.

After the close on Monday, the market saw the first release of a list of companies that had complied with the Tokyo Stock Exchange’s call to disclose plans to improve capital efficiency.

Nearly half of the companies on the prime section have responded, the bourse said, although some of Japan’s most influential companies such as Toyota Motor and SoftBank Group were absent from the list.

Their company shares seemed little affected on Tuesday, with SoftBank Group down 0.73% and Toyota Motor shares falling 0.23%.

Meanwhile, online gaming firm Nexon, entertainment production company Toho and Dai Nippon Printing were the highest percentage losers on the Nikkei, down 4.73%, 3.81% and 3.47%, respectively.

“I will be careful on this market,” said Herald van der Linde, chief Asia equity strategist at HSBC, referring to Japan’s stock market.

“Everybody is well positioned for it, everybody’s bought into it… So it might be that a lot of the good news is now priced in.”

Of the 33 industry groups on the Topix, only five advanced, with shippers at the top with gains of 2.26%.