Japan’s Nikkei Stock Average Slumps, Dragged Down by Tumble in Uniqlo Owner (Update1)

Reuters

13:10 JST, January 10, 2025 (updated at 16:05 JST, Jan. 10)

TOKYO (Reuters) – Japan’s Nikkei share average sank for a third straight session on Friday, dragged down by a tumble for Uniqlo store chain operator following a disappointing earnings report.

Investors were cautious ahead of a closely watched U.S. monthly payrolls report later in the day, which could provide crucial clues on the Federal Reserve’s policy path. Wall Street was closed overnight to mark the passing of former President Jimmy Carter.

The Nikkei index .N225 dropped 1.05% to 39,190.40, accelerating losses into the closing bell, bringing its three-day decline to 2.23%. For the week, it sagged 1.77%.

Of the Nikkei’s 225 components, 183 fell versus 41 that rose, with one ending flat.

The broader Topix .TOPX slipped 0.8%.

Providing a bright spot, takeover target Seven & i Holdings 3382.T, which operates the 7-Eleven convenience store chain, jumped 4.86% following a Bloomberg report that Apollo Global Management APO.N is considering investing as much as 1.5 trillion yen ($9.47 billion) in a management buyout.

Nvidia supplier Advantest 6857.T also lent support, climbing 5.12%.

The bulk of the Nikkei’s declines were due to a 6.53% plunge in Uniqlo-owner Fast Retailing 9983.T, by far the most heavily weighted stock on the index.

Despite recent weakness, “the Nikkei is likely to stay robust, supported by a weak yen,” said Norihiro Yamaguchi, senior Japan economist at Oxford Economics.

Domestic earnings season will move into higher gear later this month and “overall results are likely to stay solid,” he added.

The yen was steady at around 158.39 per U.S. dollar JPY=EBS – not far from 158.55, the weakest level since mid-July 2024 reached earlier this week.

A cheaper yen inflates the value of overseas revenues for Japan’s many heavyweight exporters.

($1 = 158.39 yen)