Tokyo: Stocks fall from one-week high on dour earnings, firmer yen

[TOKYO] Japanese shares retreated from a one-week high on Wednesday as downbeat earnings reports underscored the economic blow from the Covid-19 pandemic and a firmer yen weighed on exporters.

The Nikkei index ended down 0.26 per cent at 22,514.85, with the telecommunications and the consumer discretionary sectors leading the declines.

The broader Topix fell 0.04 per cent to 1,554.71.

The Nikkei has rallied 37 per cent from this year's low hit in March but has recently struggled to break above resistance around 23,000 as investors turn more cautious in the face of rising coronavirus cases at home and elsewhere.

"This is a retrenchment because the earnings so far have not been that good," said Kiyoshi Ishigane, chief fund manager at Mitsubishi UFJ Kokusai Asset Management Co.

"There's a sense that Japanese companies are lagging behind American and European corporate earnings."

Highlighting the impact of the pandemic, Mitsubishi UFJ Financial Group Inc (MUFG), Japan's largest lender by assets, said on Tuesday its net profit more than halved.

Shares in MUFG fell 0.17 per cent on Wednesday.

Sony Corp, another major company to report earnings on Tuesday, ended 1.61 per cent lower as worries over its future earnings eclipsed better-than-expected results from the company.

More Japanese companies are set to report earnings in the coming days.

There were 99 advancers on the Nikkei index against 122 decliners.

The underperformers among the top 30 core Topix names were SoftBank Group, down 4.19 per cent, followed by East Japan Railway Co, losing 2.44 per cent.

The stocks that gained the most among the Topix 30 were Hitachi, up 3.2 per cent, followed by Nintendo Co which rose 3.17 per cent before its earnings on Thursday.

The volume of shares traded on the Tokyo Stock Exchange's main board was 1.2 billion, compared with the average of 1.2 billion in the past 30 days.

REUTERS