Japan shares edge up as investors await U.S. jobs data; banks under pressure

By Tomo Uetake
TOKYO, Oct 4 (Reuters) - Japanese shares edged up on Friday
after a sharp fall the previous day and ahead of key U.S. job
data, but financials came under pressure as a soft U.S. service
sector survey fanned growth worries and pulled Treasury yields
lower.
The benchmark Nikkei average .N225 rebounded 0.3% to
21,410.20 points, after shedding 2% the previous day.
But it posted the biggest weekly loss in two months, down
2.1%.
The broader Topix .TOPX added 0.3% to 1,572.90 but ended
down 2% on the week.
On Thursday, the survey from the U.S. Institute for Supply
Management (ISM) showed its non-manufacturing activity index
falling to the lowest level in more than three years in
September, and far below expectations. The downbeat U.S. economic news adds to a set of weak data
earlier in the week, and has deepened fears that the U.S.-China
trade war is starting to hurt growth in the world's biggest
economy, resulted in Treasury yields dropping across maturities.
In Tokyo, financial stocks came under pressure, with banking
.IBNKS.T and insurance .IINSU.T sectors among the worst
performers, down 0.9% and 0.5%, respectively.
Lower U.S. interest rates squeeze banks' lending margins and
interest income as Japanese banks and insurance companies have
stepped up investments in the United States in recent years.
Another interest rate-sensitive area, the TSE REIT index
.TREIT climbed 1.1% to hit its highest in more than 12 years
as falling bond yields have spurred demand.
Elsewhere, Apple-related electronic parts makers jumped
after the Nikkei business daily reported Apple AAPL.O has told
suppliers to increase their production of its latest iPhone 11
range by up to 10%, citing sources. Murata Manufacturing 6981.T climbed 1.9%, Alps Alpine
6770.T gained 1.3% and Minebea Mitsumi 6479.T soared 2.7%.
"Some domestic players seem to be ready to buy on dips but
most of them are on the sidelines ahead of a key U.S. jobs
report that could help determine whether the Federal Reserve
cuts interest rates further," said Yasuo Sakuma, chief
investment officer at Libra Investments.
The data later on Friday is forecast to show the U.S.
economy added 145,000 new jobs in September, more than 130,000
in the previous month. (Editing by Shri Navaratnam & Kim Coghill)