Nikkei slips before US elections

Tokyo: Japan’s Nikkei fell on Monday, as the yen recouped some earlier losses, prompting investors to take profits from last week’s gain while investors shunned risk before the winner of a tightly fought US election is known.

But Toyota Motor Corp rose 2.2 per cent to a one-month high at 3,210 yen after public broadcaster NHK said it was set to slightly raise its operating profit forecast.

After the market close, the automaker raised its full-year net profit forecast to $9.7 billion even after its sales in China, the world’s biggest autos market, were battered by protests against Japan over a territorial dispute.

The Nikkei was down 0.5 per cent to 9,007.44, while the broader Topix was 0.6 per cent lower at 747.95.

Analysts said that although the weak-yen trend lends support to the market to some extent, investors still do not want to buy blue-chip electronics stocks as many of them cut their full-year outlooks.

“Investors are not still past the shocks from bad earnings. But once such pessimism is priced in, investors will likely gradually chase the market higher towards the end of the year,” said Hiromichi Tamura, chief strategist at Nomura Securities.

“Investors may stay cautious on export-sensitive electronics stocks, but the overall market will likely be supported by buying in material stocks like steelmakers.”

Panasonic Corp, which tumbled last week as the electronics maker startled the market with a massive loss outlook, extended losses, ending down 5.6 percent at 388 yen.

Sharp Corp dropped 6.7 per cent to 154 yen, hitting a two-week low after Fitch Ratings downgraded the struggling TV maker’s credit rating by six notches to B-minus after the market close on Friday.

Sharp warned on Thursday of a $5.6 billion net loss for the business year and said it might not be able to survive on its own.

Analysts said that a softer yen would continue to alleviate pessimism on poor earnings and that the Nikkei should trade between 8,950 and 9,100 in the next few days.

“The presidential election will likely set the tone for the currency market. If the dollar rises to 81 yen, investors may chase the market to around a September closing high of 9,200 over the next month or so,” said Toshihiko Matsuno, senior strategist at SMBC Friend Securities.

The yen was quoted at 80.365 to the dollar on Monday afternoon, slightly higher than the pair which stayed above 80.500 earlier.

Helped by the upbeat mood in Toyota, Honda Motor Corp added 1.2 per cent to 2,497 yen and Nissan Motor Corp gained 0.7 per cent to 691 yen.