Japan’s Nikkei was mostly flat on Friday morning as investors stayed on the sidelines ahead of Group of Seven meetings, and prospects for a US interest rate hike as early as June curbed buyers’ appetite.
The Nikkei share average was flat at 16,645.47 in mid morning trade after flitting between positive and negative territory. For the week, the benchmark index has gained 1.5 per cent.
Analysts said that investors are closely focused on a meeting of Group of Seven finance leaders in Japan starting on Friday, which is likely to take up currencies as a topic.
“Investors are careful about taking positions as they expect that discussions will not be favourable for a weaker yen,” said Takuya Takahashi, a strategist at Daiwa Securities.
He said that about 70 per cent of 200 major companies that Daiwa covers based their earnings forecasts for this fiscal year at around 110 yen against the dollar, adding that the market will likely remain sensitive about the dollar-yen levels.
Fed rate hike
During Asian trade, the dollar was at 110.00 yen after it reached a three-week high of 110.39 yen overnight after New York Federal Reserve President William Dudley said the US economy could be strong enough to warrant a rate increase in June or July.
As investors stayed risk-averse, exporters were mixed, with Toyota Motor Corp rising 0.4 per cent, Honda Motor Co dropping 0.5 per cent and Nissan Motor Co added 0.2 per cent.
Japan Tobacco dropped 2.6 per cent to a near three-week low after Britain got the go-ahead to make plain packaging compulsory on cigarettes when a court struck down a legal challenge brought by the world’s top four tobacco companies, including Japan Tobacco.
Such defensive stocks as retailers and utility companies were in demand. Shimamura Co soared 3.2 per cent and Aeon Co rose 1.1 per cent.
Kansai Electric Power Co rose 1.6 per cent, and Tokyo Electric Power Co gained 0.8 percent.
The broader Topix added 0.2 per cent to 1,339.33 and the JPX-Nikkei Index 400 advanced 0.1 per cent to 12,101.05.