Stocks

Nikkei edges up in choppy trade

Reuters Tokyo | Updated on August 06, 2018 Published on August 06, 2018

Nippon Steel & Sumitomo Metal Corp surged 1.8 per cent, Astellas Pharma added 1.4 per cent, and Mitsubishi UFJ Financial Group dropped 1.5 per cent.

Market cautious ahead of Japan-US bilateral talks this week

Japan's Nikkei share average edged up in a choppy trade on Monday morning but the gains were limited as investors remained cautious ahead of corporate earnings and this week's trade talks between Washington and Tokyo.

The Nikkei gained 0.3 per cent to 22,598.26 in midmorning trade swinging between positive and negative territory.

PBOC hikes reserve needs

The People's Bank of China had late on Friday raised the reserve requirement on foreign exchange forward positions, making it more expensive to bet against the Chinese currency.

Analysts said that the Japanese stock market is likely to move in a narrow range this week as investors are expected to stay on the sidelines amid global trade tensions.

“Investors are cautious ahead of Japan-US bilateral talks this week. There is a possibility that the yen will rise on sensitive trade talks,” said Yutaka Miura, a senior technical analyst at Mizuho Securities.

Bilateral free trade agreement

Tokyo is seeking ways to counter US pressure for a bilateral free trade agreement (FTA) and head off a rise in tariffs on its auto exports when Economy Minister Toshimitsu Motegi meets US Trade Representative Robert Lighthizer in Washington on August 9.

Gainers on Monday included iron and drug stocks, while banking shares lost ground. Nippon Steel & Sumitomo Metal Corp surged 1.8 per cent, Astellas Pharma added 1.4 per cent, and Mitsubishi UFJ Financial Group dropped 1.5 per cent.

Eyes were on earnings releases, with NTT Data jumping 7.3 per cent after its April-June profits cheered the market. The company's net profit rose 23 per cent to ¥20.81 billion thanks to strong public infrastructure business in the domestic market.

Foster Electric dived 19 per cent after it said it expects a net loss of ¥2.5 billion for the year ending March 2019 due to falling demand for headsets from its main customers, compared to its previous guidance of a net profit of ¥2.5 billion.

Meanwhile, Isuzu Motors soared more than 3 per cent after the automaker said it would buy back up to 6.34 per cent of the stock for as much as ¥80 billion after it and Toyota Motor said they would dissolve their capital ties. The broader Topix gained 0.3 per cent to 1,746.92.

Published on August 06, 2018
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