Tokyo stocks open lower on profit-taking

Tokyo stocks open lower on profit-taking

Tokyo: Tokyo stocks opened lower on Friday despite a late rally in New York, as investors cashed in after the previous day’s strong rises.

The benchmark Nikkei 225 index, which rose nearly four percent on Thursday, lost 0.51 percent or 102.12 points to 19,975.50 in early trade.

The broader Topix index turned down 0.78 percent or 11.66 points to 1,489.97 after the previous day’s rise of nearly five percent.

“It’s inevitable that selling emerges after sharp rises like yesterday’s,” said Makoto Sengoku, market analyst at Tokai Tokyo Research Centre.

On the final trading day of the year, the Nikkei was heading for its first closure with an annual loss in seven years.

Over the year, the bellwether index has lost more than 10 percent.

“The Nikkei scored annual gains for the past six years under Abenomics but it’s not the case any more,” Sengoku said, referring to Prime Minister Shinzo Abe’s pro-spending policies.

“This is because of large swings caused by the Trump administration rather than domestic problems,” he told AFP, noting President Donald Trump’s trade spat with China weighed particularly on the market.

Japan “cannot be unaffected when the world’s two biggest economies are fighting,” he said.

But Japanese corporate activity remains solid at least for now, which could invite buy-backs sometime next year, he added.

Fresh government data released Friday confirmed Japan’s job market remains tight, with unemployment staying low at 2.5 percent for November.

Factory output in November turned down 1.1 percent from the previous month, but the drop had been widely expected after an October rise in production.

The dollar edged down to 110.83 yen from 111.02 yen in New York Thursday afternoon.

In individual stocks trade, Honda fell 1.42 percent to 2,855.5 yen and Sony dropped 1.00 percent to 5,330 yen.

Major bank Mitsubishi UFJ lost 0.61 percent to 534.7 yen and IT investor SoftBank Group fell 0.73 percent to 7,227 yen.