Tokyo stocks fell off a six-month high Friday as investors locked in profits, while Nintendo dived as markets were left underwhelmed following a sneak peek at its new games console. As trading entered the final hour, a strong 6.2 magnitude earthquake hit western Japan sparking yen buying, which pushed down stocks. Japan's currency is seen as safe investment, but rally in the unit hurts the outlook for exporter profits.
"As often when there is an earthquake, the yen is bought," said Simon Pianfetti, a senior manager at the market solutions department at SMBC Trust Bank. Computer-controlled orders are placed to quickly react to news of earthquakes measuring greater than 6.0 magnitude or so, he told Bloomberg News. The yen strengthened to 103.75 on the dollar from the 104 range seen before the tremor.
The quake reportedly caused several injuries, damaging power lines and collapsing a house. The Nikkei 225 index, which was up at the lunch break, slipped 0.30 percent, or 50.91 points, to close at 17,184.59, ending a five-day winning streak. The Topix index of all first-section issues was down 0.40 percent, or 5.51 points, at 1,365.29. Investors were also adjusting positions ahead of the weekend, with Japan's latest earnings season getting into full swing next week.
Japanese trade data are due Monday and inflation figures on Friday. US growth data on Friday will also be closely watched with positive figures expected to reinforce market expectations for a December interest rate hike. In Friday trading, Takata shares jumped 2.78 percent to 369 yen, despite an official report that the rupture of one of its recalled airbags has been linked to an 11th US death.
Nissan was up 0.59 percent at 1,018 yen and Mitsubishi Motors soared 5.22 percent to 564 yen after Nissan formally took a controlling stake in the struggling carmaker Thursday. Nissan chief Carlos Ghosn will become chairman of Mitsubishi Motors as it tries to drive past a mileage-cheating scandal that hammered its reputation and slammed sales. Nintendo dived 6.54 percent to 25,185 yen as markets reacted to a preview trailer for a new long-awaited console seen as key to its business, as it competes with Sony's hugely popular PlayStation 4.
In a three-minute video on its YouTube channel, Nintendo unveiled the hybrid machine that can be played at home and on-the-go, thanks to a removable screen like a tablet with the controllers attached. "It's a disappointing console," said Amir Anvarzadeh, Singapore-based head of Japanese equity sales at BGC Partners. "It doesn't enhance the gaming experience when you have a smartphone in your pocket."