Tokyo: Nikkei falls on tech share slump

[TOKYO] Japan's Nikkei share average fell on Friday after tech shares dropped sharply following weakness on the Nasdaq market, while investors stayed cautious as the dollar slipped against the yen.

Semiconductor equipment makers tumbled, with Tokyo Electron Ltd diving 7.2 per cent and Advantest Corp declining 5.0 per cent, together contributing a hefty 53 negative points to the Nikkei benchmark.

The Nikkei dropped 0.6 per cent to 19,959.84. For the week, it declined 0.7 per cent, falling for a second week.

The broader Topix shed 0.4 percent to 1,621.22, with turnover hitting a six-week high of 2.77 trillion yen(S$33.8 billion).

Investor sentiment was also hurt by the resignation of Defence Minister Tomomi Inada over a series of gaffes, missteps and a cover-up at her ministry that have contributed to a sharp plunge in public support for Prime Minister Shinzo Abe.

"The Japanese market's upside has been capped partly due to Abe's falling support rate," said Masashi Oda, general manager at strategic department at Sumitomo Mitsui Trust Asset Management.

Over the past few weeks, the suspicion of scandal over favouritism for a friend's business and missteps by cabinet ministers have taken a toll on Abe, who until recently was favoured to win a third three-year term as party leader, and hence, premier when his current term expires in September 2018.

"There is no successor's name coming up yet so we should not be overly cautious, though investors probably won't chase the market higher for a while," Oda said.

This week, the Nikkei moved in a narrow 275-point range, traversing the psychologically-important 20,000 mark.

On Friday, Japanese companies' mixed earnings results attracted attention, with Nissan Motor Co falling 4.1 per cent after its first quarter operating profit fell 12.8 per cent on the year.

Construction equipment maker Hitachi Construction Machinery soared to a nine-year high at one point after its quarterly operating profit jumped 584.5 per cent on the year to 16.7 billion yen thanks to strong demand in China and North America.

Auto parts maker Denso Corp jumped 5.3 per cent on Friday after the company announced stronger-than-expected quarterly results and raised its full-year outlook.

Daiwa Securities tumbled 5.1 per cent after its quarterly net profit fell 21 per cent, hit by weak FICC (fixed income, currencies and commodities) trading revenues.

REUTERS