Japan's Nikkei surrenders gains to end lower after four-day rally

JAPAN’S Nikkei share average gave back its gains to inch lower on Thursday (Jun 15) as investors locked in profits after the index’s sharp gains in a four-session winning run.

The Nikkei index ended 0.05 per cent lower at 33,485.49. It, however, traded higher for most of the day, including rising as much as 0.8 per cent to a fresh 33-year high, before reversing course to snap the four-day rally in which it had gained 6 per cent.

The broader Topic inched 0.2 per cent lower to 2,293.97 on the day.

“The selling power outweighed the buying force after the Nikkei rose so sharply in the past four days,” said Shuji Hosoi, senior strategist at Daiwa Securities.

“Investors did not react to a weak yen today.”

The yen slipped to its weakest level so far this year on Thursday, as the US dollar rallied after the Federal Reserve signalled rate hikes later in the year.

Toyota Motor rose 0.45 per cent, but cut most of its early gains. Rival Honda Motor slipped 0.55 per cent.

Drug makers fell, with Eisai’s 5.91 per cent slide making it the worst performer on the Nikkei, while Daiichi Sankyo lost 3.98 per cent.

Overall, drug stocks fell 1.8 per cent, the most among the Tokyo Stock Exchange’s 33 industry subindexes.

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Gains in chip-related shares supported the Nikkei, with Advantest and Tokyo Electron climbing 1.88 per cent and 2.01 per cent, respectively. Screen Holdings rose 2.36 per cent.

Brokerages was the top performing sector, with a 3.86 per cent increase, followed by the shipping sector, which rose 1.91 per cent.

Some strategists said the Nikkei would rise further after a pause, supported by demand from foreigners.

Foreign investors were net buyers of Japanese stocks for the 11th straight week in the week ended June 10, when they bought 1.3 trillion yen (S$12.3 billion) worth of shares, more than twice the previous week’s 600 billion yen, according to data from the Ministry of Finance released on Thursday. REUTERS