TOKYO: Japan’s Nikkei share average recovered from early declines to end Wednesday little changed as strong earnings supported the market despite overall caution ahead of a parliamentary election on the weekend.
The Nikkei slipped less than 8 points to close at 29,098.24, maintaining most of the previous days surge of about 500 points. The index earlier sank as low as 28,870.25.
The broader Topix, though, slipped 0.23% to 2,013.81, with 24 of its 33 subsectors declining.
“Stock investors have a need to buy now so they are picking up names with strong earnings results, supporting the broader market,” said a market participant at a domestic securities firm.
“On the other hand, there’s a worry the market overall could see some selling off.”
Shinko Electric Industries led gainers on the Tokyo bourse with a 14.9% surge, followed by electronics parts-maker Maruwa’s 12.4% jump, after both impressed with corporate results.
Shimano advanced 8.2%, speciality chemicals company Nitto Denko gained 7.3% and Hitachi Construction Machinery added 7.1%, also on the back of strong earnings.
At the other end, Canon dropped 5.9% and precision motor-maker Nidec slid 2.9% after posting disappointing results.
At the same time, investors remained cautious as the new prime minister, Fumio Kishida, prepared to lead his Liberal Democratic Party into lower house elections on Sunday.
The LDP is expected to retain an overall majority while losing some seats but a shock by-election loss last weekend has injected an additional level of uncertainty into the contest.
“If the LDP can’t secure a majority by itself, that will weaken Kishida’s position and lead to political instability,” said Masayuki Kichikawa, chief macro strategist at Sumitomo Mitsui Asset Management.
“Many will wonder if the party can survive the upper house election next year,” said Kichikawa, referring to LDP members who could then decide to oust Kishida.
Meanwhile, the Tokyo Stock Exchange announced on its website that it was looking to extend trading hours by half an hour in the latter half of 2024, closing at 3:30 p.m. (0630 GMT) instead of the current 3:00 p.m.
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