Japanese stocks were flat on Friday morning as investors waited for a key US jobs report after unexpected signs of rising US unemployment and a stronger yen scuffed sentiment for Japan’s export-oriented economy and threatened to end a three-day winning streak.
The Nikkei share average was flat at 16,956.06.
Days of growing risk appetite subsided ahead of Friday’s comprehensive US labour report, which investors will scrutinise for signs of continued momentum in the world’s largest economy.
A raft of better-than-expected US data released throughout the week was dampened slightly by an Institute for Supply Management survey released on Thursday that showed employment in the services industry fell in February for the first time in two years, even as the sector expanded overall.
“Many market participants will be exercising caution before Friday’s jobs report, as it will be the last gauge of the US labour market before the March meeting of the Fed,’’ said Andrew Meredith, co-managing director at Tyton Capital Advisors.
“Markets are pricing in an extremely low chance of a rate hike at this stage, but we have been surprised before.”’
The yen strengthened against the dollar overnight after the soft ISM survey dampened expectations the Federal Reserve would hike interest rates soon, cutting into the profit outlook for Japan’s major exporters.
Shares of Panasonic Corp slid 1.3 per cent, while Nissan Motor Co Ltd declined 0.3 per cent.
Seiko Holdings Corp edged down 0.2 per cent after Credit Suisse cut its stock’s rating to ‘neutral’ from ‘outperform’.
Shares of Sharp Corp soared 9.4 per cent after the Nikkei business daily reported the troubled electronics maker is now in late-stage talks with Foxconn to conclude the Taiwanese company’s stalled takeover bid.
The broader Topix edged up 0.1 per cent to 1,369.97, while the JPX-Nikkei Index 400 declined 0.1 per cent to 12,398.55.