Japan’s Nikkei Ends Lower after Weak US Jobs Data; Stronger Yen Weighs (UPDATE 1)

Reuters

12:10 JST, June 5, 2024

TOKYO (Reuters) – Japan’s Nikkei share average ended lower on Wednesday as economic-sensitive stocks fell after weaker-than-expected U.S. labor market data, while the yen’s rebound hurt sentiment.

The Nikkei fell 0.89% to close at 38,490.17.

“Wall Street rose overnight after the labor market data helped U.S. Treasury yields to fall,” said Shoichi Arisawa, general manager of the investment research department at IwaiCosmo Securities.

“But the yen rose, which was negative for Japanese equities. The positive impact of falling Japanese government bond yields was limited in the current session.”

Wall Street ended higher after data showed that U.S. job openings fell to their lowest level in more than three years in April, signaling an easing in labor market tightness that supported a rate cut by the Federal Reserve this year.

U.S. Treasury yields slipped following the report. Japanese government bond (JGB) yields tracked the declines, with the 10-year bond yield JP10YTN=JBTC falling below 1% for the first time since May 24.

The yen rose to a three-week peak against the dollar overnight before retracing some of the overnight gains, driven by investors unwinding bets in emerging markets in Asia trade.

Shipping companies lost 2.86% and energy explorers fell 2.95%. Steel companies lost also lost 2.05%.

The insurance sector fell 3.73%, the most among the Tokyo Stock Exchange’s 33 industry sub-indexes.

SoftBank Groupjumped 4.64% after the Financial Times reported Elliott Management has rebuilt a stake worth over $2 billion in the technology investor.

The broader Topix lost 1.41% to 2,748.22, with Toyota Motor slipping 2.43% to become the biggest drag on the Topix.