Japan’s Nikkei Stock Average Ends Lower on Profit Booking after Sharp Gains (Update 2)

Reuters

11:18 JST, November 7, 2024 (updated at 16:20 JST)

TOKYO (Reuters) – Japan’s Nikkei share average erased its early rise to end lower on Thursday, as investors booked profits following the sharp gains in the previous session.

The Nikkei fell 0.25% to close at 39,381.41, after rising 2.6% on Wednesday to a three-week closing high.

The benchmark rose as much as 1% earlier in the session, tracking Wall Street’s record close overnight after Republican Donald Trump won the 2024 U.S. presidential election.

Trump’s victory unleashed a massive rally in the dollar, drove stocks to record highs and punished bond prices.

“Nikkei’s reversal indicated that the sharp gains in the previous session were led by short-term investors who bet on a rally on Trump trades,” said Takehiko Masuzawa, trading head at Phillip Securities Japan.

“They quickly sold stocks to book profits.”

Uniqlo-brand owner Fast Retailing fell 3.3% to become the biggest drag on the Nikkei. Chip-making equipment maker Tokyo Electron lost 1.73%.

Home interior goods maker and retailer Nitori Holdings , which is sensitive to the yen’s move, slipped 6.61%.

Railway operator Keio surged 17.67% and construction firm Taisei jumped 13.34% after they announced a share buyback.

The broader Topix ended 1% higher at 2,743.08, with Toyota Motor up 2.89%.

Financials gained as bond yields rose, with Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group up 3% and 2.59%, respectively.

Japan’s 10-year government bond yield crossed 1% for the first time in over three months.

The U.S$. rose to ¥154.7 overnight, its highest level sine July 31, before last tadingi down 0.53% at 153.8.

Insurer Tokio Marine Holdings gained 2.77%.

Of more than 1,600 stocks trading on the Tokyo Stock Exchange’s prime market, 76% rose and 21% fell, while 1% ended flat.