Japan's Nikkei edged higher on Thursday after the US Federal Reserve cut interest rates, but the market faced tough resistance as investors were eager to lock in profits after stellar gains this month. The Nikkei share average ended up 0.37% at 22,927.04 points, but stayed below a one-year intraday high of 23,008 touched earlier this week, with many investors keen to sell around 23,000. It gained 5.4% in October, its best monthly performance since September last year.
The broader Topix inched up 0.07% to 1,667.01, and the turnover surged to 2.712 trillion yen, about 20% above the annual average. The market showed scant reaction to the Bank of Japan's decision to modify its forward policy guidance by offering a stronger signal it may cut interest rates in future. Instead, traders took cues from gains on Wall Street after the Fed cut interest rates as expected.
"The Fed's rate cut has reassured markets. But that alone has not made a good reason to chase the upside further," said Masayuki Doshida, senior market analyst at Rakuten Securities. Some investors were turning cautious as the Fed signalled there would be no further reductions unless the economy soured. Upbeat earnings boosted some shares.
Sony rose 4.1% to 18-year highs after the company posted estimate-beating record profits for the second quarter thanks to robust sales of image sensors. System developer SCSK rose 8.4% to 18-year highs on strong earnings while drugmaker Shionogi & Co gained 4.5% on strong sales of its HIV drugs. Autoparts maker Aisin Seiki jumped 12.5% after the firm said it plans to merge operations with its group firm Aisin AW.
Others had less luck with semi-conductor making machine maker Advantest tumbling 8.8% despite solid earnings. Analysts said a pullback had been inevitable given the stock had risen as much as 66% since its previous quarterly earnings on hopes of a recovery in the semi-conductor sector. Similarly, manufacturer of 5G telecommunication equipment parts Anritsu fell 4.2% and many other chip-related shares were soft.
Oriental Land also dropped 3.2% as its quarterly earnings came below market expectations. Internet service firm Cyberagent fell 12.3% after its annual profit estimate for the current financial year fell short of analysts' forecasts. Despite the gain in the indexes, decliners outnumbered advancers by a 11-9 ratio, with cyclical sectors such as securities brokerages and shippers leading the losses.
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