TOKYO: Japan’s Nikkei share average fell on Friday amid caution ahead of market reaction to President-elect Donald Trump’s inaugural speech next week, while a stronger yen hurt exporters’ shares.
The Nikkei shed 0.98% to 38,193.05 by the midday break and was set to fall 1.58% for the week.
“What’s behind the market declines is a concern about a reaction to the comments from Trump who is due to be inaugurated on Monday.
Investors do not want to take risks for a possible big swing in the market,“ said Hiroyuki Ueno, chief strategist at Sumitomo Mitsui Trust Asset Management.
Japanese equities fell as the yen strengthened on hopes that the Bank of Japan (BOJ) will raise its policy rate next week.
“The interest rate hike next week seems to be almost certain but the BOJ’s future rate path is not clear yet.
Japan’s Nikkei trades higher after four sessions of losses
It is natural for investors to cut their positions under these circumstances,“ said Ueno.
The yen climbed 1.5% against the US dollar this week, the strongest weekly run since late November 2024.
A stronger yen tends to hurt exporters’ shares as it decreases the value of overseas profits in yen terms when firms repatriate them to Japan.
Chip-testing equipment maker Advantest lost 2.33% to drag the Nikkei the most. Uniqlo clothing store operator Fast Retailing slipped 0.91%.
The broader Topix fell 1% to 2,661.47, dragged lower by Nintendo’s 5.75% fall.
The gaming company on Thursday said it would release the Switch 2 console this year.
Bank shares fell, with Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group losing 2.62% and 2.39%, respectively.
The Topix’s banking index lost 2.31%.
Air conditioner maker Daikin Industries rose 1.32% to lend the biggest boost to the Nikkei. Of the more than 1,600 stocks trading on the Tokyo Stock Exchange’s prime market, 23% rose, 73% fell and 2% traded flat.
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